Jobless data from last week was released on Thursday indicating that unemployment claims jumped to 360,000, a significant increase on estimates of 330,000, while the prior week’s figure was revised upward to 328,000 from 323,000. The spike in jobless claims last week was also the biggest in six months.
Meanwhile, the Philadelphia Federal Reserve Bank said that its manufacturing index for the Mid-Atlantic region had dropped to a -5.2 for the month of May, well below expectations of 2.4, and indicating a substantial slowdown in factory production across Pennsylvania, New Jersey and Delaware.
The Commerce Department had its own unfortunate story to tell, with housing starts for the month of April down 16.5 percent to an annual rate of 853,000 units, far worse than the expected 6.4 percent drop. This data, however, was somewhat softened by an increase in building permits that destroyed expectations of a 3.8 percent gain with an advance of 14.3 percent.
Finally, the Consumer Price Index suffered its biggest drop since late 2008, down 0.4 percent, double the 0.2 percent decline expected by analysts. Consumer prices were up 1.1 percent in the year through April, well shy of the 2 percent inflation goal the Federal Reserve has set as one of the conditions for drawing down its quantitative easing program. Gas prices had also dropped by some 8 percent, and while this is certainly good news for consumers, the Fed interprets weak inflation as being the result of a lack of consumer demand.
Stocks made a valiant effort to stay in the positive but by the closing bell, the S&P 500 ended the streak it had been on since last week, down 0.50 percent to 1,650.47 points. Advanced Micro Devices (AMD) led the way down on a loss of 12.56 percent to $3.83, as Goldman Sachs (GS) downgraded the semiconductor manufacturer’s stock to sell.
Chesapeake Energy (CHK) dropped 3.73 percent to $19.89 after being downgraded to neutral by JPMorgan Chase (JPM), while Yahoo! (YHOO) lost 2.78 percent with shares closing at $26.58.
Cisco Systems (CSCO) lifted tech shares after reporting earnings afterhours on Wednesday, advancing an impressive 12.62 percent to $23.89. The company put to rest fears about its ability to compete in an extremely fluid tech market by coming in just ahead of estimates on earnings and revenue. NetApp (NTAP), JDS Uniphase (JDSU), EMC Corporation (EMC), Teradata Corporation (TDC), Juniper Networks (JNPR), and F5 Networks (FFIV) were among the 11 out of 20 of the S&P 500’s best performing components for the day.
The Dow dropped 0.28 percent to close at 15,233.22, led by Walt Disney Co. (DIS), down 1.77 percent to $66.47, Wal-Mart Stores (WMT) down 1.70 percent to $78.50 after releasing an underwhelming earnings report, and Home Depot (HD) down 1.45 percent to $76.75.
The Nasdaq was down 0.18 percent to close at 3,465.24 points. Shares for Facebook (FB) dropped 1.77 percent to $26.13 amid increasing criticism of its “Facebook Home” Android-based software, while Symantec Corporation (SYMC) was down 1.07 percent to $24.30, and Intel (INTC) lost 1.07 percent to $23.94. The ExOne Company (XONE), manufacturer of the much talked-about 3-D printer, dropped over 8 percent to close at $37.82.
On the upside, Tesla Motors (TSLA) continued its journey to $100, closing on an advance of 8.73 percent to $92.25.