Weak Data Hit Stocks

Updated from 8:07 a.m. EDT

Stocks on Wall Street were falling early Thursday as a disappointing economic report robbed the market of its earlier upward momentum.

The Dow Jones Industrial Average sank 24 points to 12,874, and the S&P 500 was off marginally at 1408. The Nasdaq Composite edged down 1 point to 2496.

Index futures had been pointing to a higher open, but the sentiment turned downward after the Federal Reserve said industrial production fell 0.7% in April, worse than the 0.3% decline that had been expected. March was revised to show an increase of only 0.2%, rather than the 0.3% uptick that had been reported.

Capacity utilization was also a bit light, coming in at 79.7% compared with the 80.1% consensus forecast.

Another drag was the New York Empire State manufacturing index, which registered at negative 3.2, whereas analysts were expecting a reading of 0.

Elsewhere on the economic docket, jobless claims were roughly in line with expectations, rising by 6,000 to 371,000. That was about 1,000 more than had been predicted.

Last time out, the major indices rallied strongly for most of the session thanks to encouraging inflation data, until the final hour, when profit-taking deflated most of those gains. At the end of the day, the Dow rose 66 points to 12,898, and the S&P 500 climbed 6 points to 1409. The Nasdaq edged up 2 points to 2497.

As the new day began, traders were greeted with word that CBS CBS would buy Internet media company CNET CNET for $1.8 billion. That news lifted CNET by more than 40%, but CBS was slipping 3%.