U.S. Stock Futures Close Down, Unable to Shake off Disappointing Manufacturing Data from China and Europe

4:01 PM, Mar 22, 2012 -- U.S. stocks closed down Thursday after new reports finding drops in manufacturing activity in China and Europe overshadowed data pointing to continued improvement for U.S. employment.

Global stocks began their retreat this morning after a preliminary measure of the Chinese purchase managers' index fell to 48.1 this month, its lowest reading since last November, according to HSBC Holdings Plc and Markit Economics. Readings below 50 indicate a contraction. A similar report following manufacturing and services in Euro-area countries also slid to 48.7 during March from a 49.3 reading last month, Markit reported.

In the U.S., initial jobless claims fell to 348,000 in the week ended March 17, the fewest since February 2008, Labor Department figures showed today. Economists polled by Reuters had forecast claims rising to 354,000 last week.

Also, the Conference Board's index of leading economic indicators rose 0.7% last month, up from 0.2% in January. The 0.7% gain was the fifth consecutive increase and topped expert opinion by 0.1%, reflecting a rise in orders of non-defense capital goods, including aircraft, and manufacturer orders of consumer goods.

In company news, Diamond Foods Inc. (DMND) shares plunged 6.8% following the company's announcement that it is suspending its quarterly dividend to seek access to extended credit from bankers.

BluePhoenix Solutions (BPHX) rallied two days after signing agreements to refinance certain of its debts and to raise $0.5 mln of new debt through a bridge loan.

Gold futures ended at a nine-week low. Gold for April delivery fell $7.80, or 0.5%, to $1,642.50 an ounce on the Comex division of the New York Mercantile Exchange. Crude-oil futures also ended lower; crude for May delivery ended $1.92 lower, or 1.8%, at $105.35 a barrel on the New York Mercantile Exchange.

Here's where the markets stood at end-of-day:

NYSE Composite Index down 0.92%

Dow Jones Industrial Average down 0.60%

S&P 500 down 0.72%

NASDAQ Composite down 0.39%

GLOBAL SENTIMENT

Nikkei 225 up 0.40%.

Hang Seng Index up 0.22%.

China Shanghai Composite Index down 0.10%.

FTSE 100 down 0.81%.

UPSIDE MOVERS

(+) IFDY, (+2.3%) Receives purchase orders from Toyota.

(+) VRNG, (+3.7%) Launches video ringtone service in India.

DOWNSIDE MOVERS

(-) TEX, Plans $300-million sales of senior unsecured notes.

(-) C, Said to be again considering sale of Smith Barney unit.

(-) XEC, Company Commences Buy-Back of Debt.