US stocks fell further on Thursday as investors worried that a record oil price would curb corporate profits, and a brokerage house downgraded Wal-Mart Stores Inc. because of concern about the sales outlook for the world's largest retailer. The escalating violence in the Middle East, the stand off over Iran's nuclear program and a lack of progress in getting North Korea to agree to disarmament talks unsettled investors, who fled to the relative safety of US government bonds. The Dow and Nasdaq stock were pushed down more than 1 percent.

Sen. John McCain (R) of Arizona said Thursday that senior officials in the Bush administration had agreed to prosecute suspected terrorists using a court system similar to the military's code of justice. McCain said the White House would not insist upon legislation authorizing military commissions established by the Pentagon. The promise would contradict testimony heard earlier this week from administration officials, who told lawmakers that Congress should not turn to the Uniformed Code of Military Justice because it would grant terrorists too many freedoms and would be impractical on the battlefield. Last week, lawmakers and the administration agreed that legislation woud be necessary after the Supreme Court ruled 5 to 3 that the Pentagon's military commissions – established to prosecute suspected terrorists – violated international law and were not authorized by Congress.

The number of Americans filing new claims for unemployment benefits jumped last week, reflecting a spring slowdown in the economy. The Labor Department said Thursday that applications for jobless benefits totaled 332,000 last week, an increase of 19,000 from the previous week, exceeding market expectations. The latest weekly figure included some 4,000 claims for jobless benefits filed by workers in New Jersey during the weeklong state government shutdown and an unspecified number of claims sparked by seasonal shutdowns in the auto industry.

Firefighters struggled to contain a 37,000-acre wildfire moving southwest towards a resort in Yucca Valley, California. The fire that was close to the San Bernardino National Forest, could grow and get dangerously close to Big Bear Lake, a community of summer lake resorts with about 5,500 residents, fire officials said. A severe bark beetle infestation has killed many trees in recent years, and would fuel the fire there. The fire, which was ignited by lightning during the weekend, had destroyed 42 houses, 55 buildings, and 91 vehicles around the desert community located about 100 miles East of Los Angeles, authorities said.

US Park Police in Washington beefed up patrols around national landmarks Wednesday, after the District of Columbia's police chief declared a crime emergency in reponse to a spate of violence that included the killing of a British activist. At least 14 people have been killed in Washington this month.

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