NEW YORK ( TheStreet) -- Major U.S. stock markets plummeted Thursday, the most in eight weeks, as Cisco (CSCO - Get Report) and Wal-Mart (WMT - Get Report) lowered their outlooks for the remainder of 2013 amid signs that the Federal Reserve may begin curbing its asset purchases in the fall.
The S&P 500 closed off 1.4% to 1,661.31, posting its largest decline since June 20. The benchmark index has dropped 2.8% since hitting its all-time closing high on Aug. 2. The S&P had gained 18% this year through the end of July.
"The markets certainly are, from their reaction today, seem to think that the taper is coming earlier," said Chris Gaffney, senior market strategist at EverBank.Thursday's economic numbers have "rekindled investors' fears about an early end to the U.S. Fed's accommodative policy," Julian Jessop, the London-based chief global economist at Capital Economics said in a note. Cisco was the biggest laggard in the S&P 500 as shares plunged 7.2% to $24.49 after the networking giant announced job cuts that will affect 4,000 employees, or 5% of its global workforce. Wal-Mart shares slipped 2.6% to $74.41 after the retail giant slashed its full-year guidance explaining that the retail environment remains challenging in both the U.S. and international markets. JPMorgan Chase ( JPM ) slumped 1.6% to $53.29 as two former employees of the bank have been charged in the "London whale" case with wire fraud, filing false information with the Securities and Exchange Commission, among other crimes. Kohl's Corp ( KSS ) emerged as a bright spot in the S&P, climbing 5.3% to $53.51 after the department store chain reported a 0.9% rise in second-quarter same-store sales versus a 2.7% decline during the same period a year ago. Weekly U.S. unemployment data was one of the highlights among the heavy spate of economic reports released Thursday as initial jobless claims in the week ended Aug. 10 fell 15,000 to a lower-than-expected 320,000, the lowest level since late 2007, according to the Labor Department. Economists polled by Thomson Reuters were expecting jobless claims of 335,000. Meanwhile, the consumer price index rose 0.2% in July, as expected, after increasing 0.5% in June, according to the Bureau of Labor Statistics. The core CPI, which excludes food and energy costs increased 0.2%, also in line with expectations, after increasing 0.2% the prior month. The benchmark 10-year Treasury was shedding 25/32, bolstering the yield to 2.773%. At the most intense point of the bond selloff this morning, yields had climbed all the way to a fresh two-year high at 2.823% driven especially by the view that more evidence of an improving labor market that was reported Thursday and the data showing a rise in U.S. consumer price inflation in July will provide the U.S. central bank with wiggle room to begin tapering its massive stimulus bond-buying program later this year. Gold prices for December delivery surged $27.50 to settle at $1,360.90 an ounce as traders piled into the yellow metal as stocks slumped. Bullard, who has made numerous appearances this week, reiterated during a speech at a Thursday Fed event sponsored by the Bank's Louisville, Ky. branch that the Fed "still needs to see more data on macroeconomic performance for the second half of 2013 before making a judgment" on the alteration of the pace of the central bank's asset purchases. Follow @atwtse -- Written by Andrea Tse and Joe Deaux in New York >To contact the writer of this article, click here: Andrea Tse.>