U.S. markets dropped sharply in early trading Thursday as investors sifted
through a half a dozen economic reports.
The Labor Department said first-time unemployment claims fell by 15,000 to 320,000, the lowest number in nearly six years. The department also reported on consumer prices, which rose 0.2 percent in July, notching an annual gain of 2 percent, up from 1.8 percent in June.
The New York Federal Reserve Bank said manufacturing in the state remained positive, but the indexes showed growth slower in August than in the previous month. Similarly, the manufacturing index for mid-Atlantic states slipped from 19.8 to 9.3, remaining positive, but indicating a slower pace of activity.
The Fed in Washington said industrial production was flat in July, owing in part to cooler weather that allowed some to turn off their air conditioners.
The National Association of Home Builders said their Housing Market Index -- a measure of builder confidence -- added three points in August to reach 59.
Investors, however, are at a crossroads. As the economy improves, the more likely it is that the Federal Reserve will pull back on its $85 billion per month quantitative easing program, which is putting pressure on interest rates. The Fed has pegged monetary policy to the unemployment rate, but could choose to abandon that concept if inflation gets out of hand. Its stated goal is to keep inflation at 2 percent or lower.
In early trading Thursday, the Dow Jones industrial average lost 175.75 points or 1.16 percent to reach 15,160.45. The Standard & Poor's 500 shed 19.78 points or 1.17 percent to 1,665.65.
The technology-heavy Nasdaq composite index dropped 51.41 points or 1.4 percent to reach 3617.99.
Technology stocks were jolted by Cisco Systems announcing it would cut 4,000 jobs. Chief Executive Officer said the business climate was "challenging inconsistent," MarketWatch reported.
The benchmark 10-year treasury note dropped 18/32 to yield 2.785 percent.
In Asia, Japan's Nikkei 225 stock index dropped 2.12 percent, 297.22 points, to 13,752.94.
Crude-oil futures were higher, adding 74 cents or 0.7 percent to $107.31 per barrel on the New York Mercantile Exchange.
Gold for December delivery was down $4.10 to reach $1,329.20 a troy ounce on the New York Mercantile Exchange.
September silver gained 9.8 cents to reach $21.885 an ounce.
The euro fell to $1.3259. Against the yen, the dollar rose to 97.93 yen.
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