The leading blue chip Dow Jones Industrial Average fell 134.13 points (1.08 per cent) to 12,308.70 in initial deals after the New York Stock Exchange opened for trading.

The Dow closed lower Wednesday after the Federal Reserve slashed its main interest rate by half-a-percentage point to 3.00 per cent in a bid to shore up economic growth amid a deepening housing slump.

The tech-heavy Nasdaq composite shed 33.38 points (1.42 per cent) to 2,315.62 while the Standard & Poor's(S&P) 500 index lost 13.03 points (0.96 per cent) to 1,342.78.

'The tone remains poor and it will take time for the focus on all things bearish to change. But the rapid rate cuts and the lack of broad deterioration in economic trends to recessionary levels will eventually have an impact,' said Dick Green, a market analyst at Briefing.com.

Analysts said the jump in jobless claims had spooked some investors, as the government reported that claims rose by 69,000 to 375,000 for the week ended January 26.

Economists had only expected claims to rise to around 320,000, but cautioned that the weekly report can be a volatile snapshot. -- AFP