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U.S. stocks decline after economic reports; Dow Jones down 0.41%

Published 08/23/2012, 09:42 AM
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Investing.com - U.S. stocks opened lower on Thursday, as the release of disappointing U.S. data weighed on sentiment, although the Federal Reserve signaled the possibility for fresh easing measures in the near future.

During early U.S. trade, the Dow Jones Industrial Average dropped 0.41%, the S&P 500 index fell 0.29%, while the Nasdaq Composite index declined 0.42%.

The U.S. Department of Labor said the number of people filing for initial jobless benefits last week rose by 4,000 to a seasonally adjusted 372,000, compared to expectations for a decline of 3,000 to 365,000.

The previous week’s figure was revised up to 368,000 from a previously reported 366,000.

Separately, preliminary data showed that manufacturing activity in the U.S. improved modestly in August, but still recorded the third lowest reading in the past 35 months.

Market research group Markit said that its preliminary manufacturing purchasing managers’ index rose to a seasonally adjusted 51.9 in August from a final reading of 51.4 in July. Analysts had expected the index to ease down to 51.3 in August.

The data came after the minutes of the Fed’s August meeting showed that many policymakers think additional easing may be warranted "fairly soon" unless there is evidence of a "substantial and sustainable" strengthening in the economic recovery.

Among earnings, Hewlett-Packard shares dove 7.45%, after suffering another quarter of slumping demand for personal computers and services aimed at businesses.

Meanwhile, Big Lots sank 18.77% as the retailer posted lower-than-expected earnings and slashed its full-year adjusted profit forecast.

Also on the downside, Boeing tumbled 1.68% after Australia’s Qantas Airways posted its first annual loss in at least 17 years, leading it to cancel an order for a new fleet of 35 Boeing 787-9 aircraft, worth USD8.5 billion.

Separately, Boeing's second-largest union, the Society of Professional Engineering Employees in Aerospace, said it had filed a complaint against the plane maker, alleging it had violated labor law during an employee orientation meeting.

The aircraft giant was also among a list of firms mentioned in a Securities and Exchange Commission rule adopted on Wednesday, saying that they must scrutinize their purchases of four metals to make sure they don’t help fund human-rights abuses in Africa.

More precisely, the regulator instructed companies that build products with tin, tantalum, tungsten and gold to make “reasonable” attempts to find out if the materials came from Democratic Republic of Congo mines supporting violent armed groups.

Apple, which was also included in the SEC list, saw shares dip 0.03%, as jurors were set to begin their second day of deliberations in the multibillion dollar patent infringement case opposing the iPhone maker to Korean rival Samsung Electronics.

Other stocks in focus included Salesforce.com, due to report earnings after the closing bell.

Across the Atlantic, European stock markets were mixed to sharply lower. The EURO STOXX 50 tumbled 1.15%, France’s CAC 40 dropped 0.99%, Germany's DAX retreated 0.99%, while Britain's FTSE 100 eased up 0.01%.

During the Asian trading session, Hong Kong's Hang Seng Index jumped 1.23%, while Japan’s Nikkei 225 Index advanced 0.51%.

Later in the day, the U.S. was to release official data on new home sales.


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