NEW YORK (TheStreet) -- Benchmark U.S. stock indices were lower Thursday after a smaller-than-expected rise in consumer spending and an increase in a key inflation gauge.
The Dow Jones Industrial Average was down 0.4% to 16,798.38. The S&P 500 fell 0.4% to 1,951.50. The Nasdaq declined 0.4% to 4,362.22.
As expected, personal income increased by 0.4% in May. Personal spending ticked up a less-than-expected 0.2% vs. the average economist's estimate of 0.4%. The reading, however, rose from April's flat reading.
The core PCE price index rose by an in-line 0.2% month over month, pushing the year-over-year index to 1.5%. These increases arrive after the recent acceleration in the Consumer Price Index.
As inflation concerns pick up, Peter Cardillo, chief market economist at Rockwell Global Capital, acknowledged that inflationary pressure at the producer level has been, in some cases, passed on to the consumer. However, wage inflation remains dormant.
"We reiterate that until higher labor costs become a problem, the chances of the Fed's inflation target being met are still slim," Cardillo said in a note.
Jobless claims dipped by 2,000 in the week of June 21 to 312,000, vs. the consensus estimate of 310,000.
Individual companies in the spotlight Thursday include Barclays (BCS), GoPro (GPRO - Get Report), Allergan (AGN), Bed Bath & Beyond (BBBY), Nike (NKE), General Motors (GM) and Alcoa (AA - Get Report).
Alcoa rose 1.9% to $14.82 after it signed an agreement to buy aerospace jet engine components company Firth Rixson from Oak Hill Capital Partners for $2.85 billion in cash and stock. Barclays committed fraud in the sale and marketing of a "dark pool," an alternative trading platform used for large stock sales, according to charges brought by New York Attorney General Eric Schneiderman. Shares were diving 6.5% to $14.69. Hedge fund Paulson & Co. has amassed a large stake in Allergan of more than 6 million shares and supports a deal between the Botox maker and Valeant Pharmaceuticals (VRX), people familiar with the matter told Reuters. Allergan shares rose 0.2%. General Motors told dealers in the U.S. and Canada to stop selling 2013 and 2014 Chevrolet Cruze sedans because of a potential defect in air bags made by air bag supplier Takata. Shares were down 1.7% to $36.47.
Bed Bath & Beyond reported fiscal first-quarter earnings that were short of analysts' expectations. Shares were tumbling 9.2% to $55.52.
Shares of GoPro, the maker of wearable sports cameras, rose 30.3% to $31.27 after it opened for trading Thursday. Late Wednesday, GoPro sold 17.8 million shares at $24 each in its IPO.
Wall Street expects sneaker and athletic apparel maker Nike to post fourth-quarter earnings on Thursday of 75 cents a share on revenue of $7.34 billion.
Benchmark U.S. stock indices gained ground on Wednesday, taking soft domestic economic data in stride.
Cardillo wrote that while the outlook remains positive for stocks, the chances of a summer dull trading range is likely to supersede positive second-quarter earnings in a few weeks.
-- By Andrea Tse in New York