Stocks Lose Ground on Downbeat Data

NEW YORK (TheStreet) -- Stocks took a step back Thursday after the latest reads on Philly-area manufacturing and initial jobless claims heightened fears of a stalled recovery, overshadowing news that Intel(INTC) plans to buy McAfee(MFE) for $7.7 billion.

The Dow Jones Industrial Average lost 144 points, or 1.4%, to 10,271. The S&P 500 shed 19 points, or 1.7%, to 1,076 and the Nasdaq declined by 37 points, or 1.7%, at 2179.

McAfee's stock soared nearly 60% to $47.01 on news that Intel plans to buy the security technology company for $7.68 billion, or $48 a share. The offer represents a significant premium to McAfee's closing price of $29.23 a share on Wednesday. Intel's stock finished Thursday's session 3.2% lower at $18.96.

Daniel Penrod, senior industry analyst at the California Credit Union League, said the Intel deal was likely serving as a ray of hope amid the morning's influx of weaker-than-expected data.

"I don't think there's any one piece of data that's weighing more than others because I think the market is looking at things more holistically. However, I do think the market is concerned by manufacturing at this point and looking to see whether the excess is being picked up so that we can move towards job growth."

"Originally during the downturn, the market was looking at housing and then shifted to look more closely at the unemployment numbers. Now I think the shift is more to retail and manufacturing to see where we're headed," Penrod said, adding, "The hope is that we'll see a back-to-school bump."

Overseas on Thursday, Hong Kong's Hang Seng inched 0.2% higher while Japan's Nikkei jumped 1.3%. The FTSE in London shed 1.7%, and the DAX in Frankfurt lost 1.8%.

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