Investing.com - U.S. stocks dropped on Thursday after a mixed bag of U.S. economic indicators made the uneasy task of predicting when the Federal Reserve will scale back stimulus measures even more difficult.
Stimulus measures tend to inflate stock prices by keeping interest rates low.
At the close of U.S. trading, the Dow Jones Industrial Average finished down 1.47%, the S&P 500 index fell 1.43%, while the Nasdaq Composite index fell 1.72%.
The Department of Labor reported earlier that weekly jobless claims in the U.S. fell to their lowest level since January 2008 last week, dropping by 15,000 to 320,000.
The Department of Labor also revealed that the U.S. consumer price index rose 0.2% in July from June and 2.0% from July of last year, in line with analysts' forecasts.
The core consumer price index, which is stripped of volatile food and energy costs, also rose 0.2% in July from June and 1.7% on year, also matching consensus forecasts.
The data reinforced views held by many the economic recovery may be strong enough to prompt the U.S. Federal Reserve to announce plans to taper its monthly USD85 billion bond-buying program this year, though soft output data dampened recent expectations for tapering to begin at the Fed's September meeting.
U.S. industrial production came in flat in July, according to the Federal Reserve, missing expectations for a 0.3% increase.
A separate Federal Reserve report revealed that manufacturing activity in the Philadelphia-region of the U.S. expanded at its slowest pace in four months in August, while manufacturing activity in New York state fell unexpectedly.
The Philadelphia Fed Manufacturing Index fell to 9.3 in August from 19.8 in July, falling far short of market forecasts for a 15.0 reading.
The Federal Reserve's New York Empire State Manufacturing Index fell to 8.24 in August from 9.46 in July, defying expectations for a gain to 10.00.
The data prompted many to trade on expectations that the Fed will put off tapering asset purchases until December.
Adding to investor unease, fears began to brew that stocks may roil when the Fed withdraws its monetary support, as economic fundamentals may not be strong enough to ensure a seamless transition to stocks growing on their own from growing on Fed stimulus measures.
Leading Dow Jones Industrial Average performers included Alcoa, up 0.12%, Caterpillar, up 0.09%, and General Electric, which was down 0.29%.
The Dow Jones Industrial Average's worst performers included Cisco, down 7.24%, Hewlett-Packard, down 4.56%, and Home Depot, down 2.98%.
European indices, meanwhile, finished lower.
After the close of European trade, the EURO STOXX 50 fell 0.64%, France's CAC 40 fell 0.51%, while Germany's DAX 30 finished down 0.73%. Meanwhile, in the U.K. the FTSE 100 finished down 1.58%.
On Friday, the U.S. will release data on building permits, a leading indicator of future construction sector activity, as well as data on housing starts. The University of Michigan is to release its closely watched preliminary data on consumer sentiment.
Stimulus measures tend to inflate stock prices by keeping interest rates low.
At the close of U.S. trading, the Dow Jones Industrial Average finished down 1.47%, the S&P 500 index fell 1.43%, while the Nasdaq Composite index fell 1.72%.
The Department of Labor reported earlier that weekly jobless claims in the U.S. fell to their lowest level since January 2008 last week, dropping by 15,000 to 320,000.
The Department of Labor also revealed that the U.S. consumer price index rose 0.2% in July from June and 2.0% from July of last year, in line with analysts' forecasts.
The core consumer price index, which is stripped of volatile food and energy costs, also rose 0.2% in July from June and 1.7% on year, also matching consensus forecasts.
The data reinforced views held by many the economic recovery may be strong enough to prompt the U.S. Federal Reserve to announce plans to taper its monthly USD85 billion bond-buying program this year, though soft output data dampened recent expectations for tapering to begin at the Fed's September meeting.
U.S. industrial production came in flat in July, according to the Federal Reserve, missing expectations for a 0.3% increase.
A separate Federal Reserve report revealed that manufacturing activity in the Philadelphia-region of the U.S. expanded at its slowest pace in four months in August, while manufacturing activity in New York state fell unexpectedly.
The Philadelphia Fed Manufacturing Index fell to 9.3 in August from 19.8 in July, falling far short of market forecasts for a 15.0 reading.
The Federal Reserve's New York Empire State Manufacturing Index fell to 8.24 in August from 9.46 in July, defying expectations for a gain to 10.00.
The data prompted many to trade on expectations that the Fed will put off tapering asset purchases until December.
Adding to investor unease, fears began to brew that stocks may roil when the Fed withdraws its monetary support, as economic fundamentals may not be strong enough to ensure a seamless transition to stocks growing on their own from growing on Fed stimulus measures.
Leading Dow Jones Industrial Average performers included Alcoa, up 0.12%, Caterpillar, up 0.09%, and General Electric, which was down 0.29%.
The Dow Jones Industrial Average's worst performers included Cisco, down 7.24%, Hewlett-Packard, down 4.56%, and Home Depot, down 2.98%.
European indices, meanwhile, finished lower.
After the close of European trade, the EURO STOXX 50 fell 0.64%, France's CAC 40 fell 0.51%, while Germany's DAX 30 finished down 0.73%. Meanwhile, in the U.K. the FTSE 100 finished down 1.58%.
On Friday, the U.S. will release data on building permits, a leading indicator of future construction sector activity, as well as data on housing starts. The University of Michigan is to release its closely watched preliminary data on consumer sentiment.