Stocks Drop as Weak Economic Data Offset Cisco
NEW YORK (TheStreet) -- Stocks fell Thursday after disappointing housing, jobs and manufacturing reports heightened concerns that the historic market gains this year have occurred despite questions about the strength of the U.S. economic recovery.
The S&P 500 lost 0.5% to 1,650.47, trimming its gain in 2013 to 15.73%.
The Philadelphia Federal Reserve Bank said manufacturing firms responding to its monthly Business Outlook Survey suggested that regional manufacturing activity weakened in May. The survey's broadest measure of manufacturing conditions, the diffusion index of current activity, decreased to negative 5.2 this month from 1.3 in April, the Philly Fed said. A rise to 2.4 was expected by economists.The Labor Department reported that initial jobless claims rose 32,000 to a higher-than-expected 360,000 in the week ended May 11, while the four-week moving average increased 1,250. Economists, on average, were expecting initial jobless claims of 330,000, according to Thomson Reuters. Continuing claims in the week ended May 4 fell 4,000 to 3.009 million, which was still a higher-than-expected level. Economists were expecting a dip to 3 million. The Dow Jones Industrial Average declined 0.3% to 15,233.22. Cisco was the largest-gainer on the S&P 500, surging 12.5% to $23.87 after the biggest maker of computer-networking equipment beat on both top and bottom lines for its fiscal third quarter. Rival F5 Networks added 3.4% to $82.60. Tesla Motors surged 8.7% to $92.20 as the electric car maker said that cofounder Elon Musk is investing $100 million in the company as the electric car maker uses its shares to issue stock and repay government loans. In total, Tesla expects to raise about $830 million through the stock issuance. Advanced Micro Devices (AMD), the biggest loser in the S&P, plunged 13% to $3.83 after the No. 2 maker of personal-computer processors was downgraded to "sell" from "neutral" by Goldman Sachs analysts, who expect continued disappointing results in the PC segment to mitigate the impact of increased revenue from gaming. The Bureau of Labor Statistics said the consumer price index fell a bigger-than-expected 0.4% in April and that the core CPI, which excludes food and energy prices, edged up by a less than expected 0.1%. The consensus estimate was for a 0.2% fall in the CPI and 0.2% rise in the core CPI. The Census Bureau reported that housing starts fell 16.5% in April to a seasonally adjusted annual rate of 853,000, falling short of the average economist estimate of 973,000. Building permits rose 14.3% to a seasonally adjusted annual rate of 1.017 million, which was above the expected pace of 945,000 units. June gold futures were tumbling $17.10 to $1,379.10 an ounce. June oil futures were up 4 cents to $94.34 a barrel. Follow @atwtse Written by Andrea Tse in New York >To contact the writer of this article, click here: Andrea Tse.
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