Stocks and interest rates fell sharply yesterday as investors grew more pessimistic about the economic recovery.

Reports on initial jobless claims and durable goods orders contributed to investors’ darker view of the economy. The reports come a day after the Federal Reserve issued a statement on the economy that showed the central bank is also more cautious about a recovery.

The Dow Jones industrial average fell more than 80 points in morning trading. Broader indexes also fell.

Interest rates rose in the Treasury market as investors uncertain about stocks opted for the smaller but safer returns that bonds offer. The yield on the 10-year Treasury note fell to 3.09 percent from 3.12 percent late Wednesday. Because the the 10-year yield is a benchmark for interest rates on mortgages and consumer loans, rates on those loans are expected to fall as well.

The Labour Department said initial claims for unemployment benefits fell to a seasonally adjusted 457,000 last week. That’s slightly better than the 460,000 forecast by economists polled by Thomson Reuters.

However, initial jobless claims are still above levels that would signal employers are ramping up hiring. Claims have remained high in recent months, raising doubts about whether a strong, sustained recovery can occur without significant job growth.

A second report showed orders for durable goods fell last month for the first time in six months. Orders for big-ticket goods fell 1.1 percent in May, slightly better than the 1.3 percent drop predicted.

The decline was due primarily to transportation orders. Excluding transportation, orders actually rose 0.9 percent after falling in April. Manufacturing has been one of the few areas of the economy that has shown consistent growth, but it hasn’t been enough to propel stocks higher. A weak jobs recovery and continued problems in the housing market have overshadowed upbeat signs in manufacturing.

In morning trading, the Dow fell 84.04, or 0.8 percent, to 10,214.55. The Standard & Poor’s 500 index fell 10.09, or 0.9 percent, to 1,081.95, while the Nasdaq composite index fell 23.00, or 1 percent, to 2,231.23.

The unemployment and durable goods orders reports come a day after the Fed said the economy is continuing its recovery, but that risks remain. The market also had bad news Wednesday from the Commerce Department, which said sales of new homes fell to the lowest level on record.

The evidence has been growing in recent weeks that the economy is growing, but not as fast as investors hoped. That has helped push stocks off their highs for the year, which were set in late April.

The Fed said a recovery could be slow, hurt in part by weakness overseas. The central bank referred to problems that several European countries are facing as they try to cut their spending to pay down huge debts. The concern is that a slowdown in European economies could affect recoveries in other countries including the U.S.

Those concerns have hurt the euro in recent months. The currency used by 16 countries was down to $1.2314 Thursday. Stocks tend to fall when the euro does because the currency is seen as a measure of investors’ confidence in Europe’s ability to contain its debt problems.

Overseas, Britain’s FTSE 100 fell 0.6 percent, Germany’s DAX index dropped 0.5 percent, and France’s CAC-40 fell 1.2 percent. Japan’s Nikkei stock average rose 0.1 percent.