The major U.S. equity averages tumble again as data on jobless claims and manufacturing activity disappoints.
NEW YORK (TheStreet) -- The major U.S. stock averages continued this week's losing streak after the latest data on the employment picture and manufacturing activitiy disappointed investors.
A poor outlook from retailing giant Wal-Mart Stores(:WMT) also contributed to the negativity. The selling pressure extended the recent weakness in equities as worries about the fiscal cliff and the eurozone's stability contribute to mounting pessism about the global economic picture.
The Dow Jones Industrial Average fell more than 28 points, or 0.23%, to close at 12,542 in a choppy day of action. The blue-chip index has now fallen in four straight sessions and in six of the past seven days.
Breadth was negative with losers ahead of winners, 16 to 14. The biggest percentage decliners were AT&T(:T), Alcoa(:AA), Verizon(:VZ), and Wal-Mart, which dropped 3.6%.
The world's largest retailer reported better-than-expected earnings for the third quarter but revenue fell short of the consensus estimate. Wal-Mart also trimmed its full-year profit outlook and gave disappointing guidance for the fourth quarter.
The leading Dow gainers were Bank of America(:BAC), Cisco(:CSCO), and Coca-Cola(:KO)
The S&P 500 was off more than 2 points, or 0.16%, to close at 1353, while the Nasdaq slid nearly 10 points, or 0.35%, to finish at 2837.
The weakest sectors in the broad market were basic materials, health care, services, and utilities. Conglomerates, consumer cyclicals, and financials finished in the green.
Decliners outnumbered advancers by about a 2-to-1 ratio on the New York Exchange, and 1.6-to-1 ratio on the Nasdaq. Volume totaled 3.91 billion on the Big Board and 2.01 billion on the Nasdaq.
While it's considered to be skewed by the impact of Hurricane Sandy, Thursday's employment data was less than heartening. The Labor Department said initial jobless claims for the week ended Nov. 10 rose by 78,000 to 439,000 from the previous week's upwardly revised 361,000 and was substantially above the recent trend of slightly below 370,000. Economists were expecting jobless claims of 375,000.
The four-week moving average was 383,750, an increase of 11,750 from the prior week's 372,000.
Continuing claims for the week ended Nov. 3 increased 171,000 to 3.334 million from the preceding week's upwardly revised level of 3.163 million. Economists were forecasting continuing claims of 3.21 million.
"The spike in claims was clearly due to hurricane-related job losses," said Jim O'Sullivan, chief U.S. economist at High Frequency Economics. "Based on previous hurricanes, claims will probably remain elevated for at least a few weeks before subsiding again -- the implied weakening should not be extrapolated. Unfortunately, we don't know the precise hurricane impact, so the information value of the data for gauging the underlying trend will be limited for the next few weeks."
The Philadelphia Fed's general business conditions index registered a decline to -10.7 in November from 5.7 in October, which was worse that the predicted decline to 2.
The Empire State Manufacturing Survey improved to -5.2 in November from -6.2 the prior month and came in better than the expected fall to -6.7.
Like the New York Fed survey, the Philly Fed report alluded to disruptions from Hurricane Sandy; but,RDQ Economics said Sandy was not the entire story.
"The six-month outlook in this Philly Fed report shows softer general business conditions, slower growth in employment, and a decline in capital spending," the firm said. "Though it is still early days for the November regional manufacturing indicators, this report suggests that following two months of improvement the national ISM manufacturing survey may indicate weaker manufacturing conditions for November."
Meantime, Andrew Wilkinson, chief economic strategist at Miller Tabak, suggested that the stark contrast between Empire State and Philly Fed reads could be explained by the fact that respondents marginally further South "geared their answers with greater pessimism on account of the proximity of the storm."
The October consumer price index increased 0.1%, as expected; the core CPI rose 0.2%, more than the estimated 0.1% increase.
The FTSE 100 in London finished down 0.77%, while the DAX in Germany was off 0.82% on Thursday as U.K. retail sales declined more than expected in October and Eurostat said Thursday that the eurozone economy shrank by 0.1% between July and September, after contracting by 0.2% in the preceding three months.
Japan's Nikkei average finished higher by 1.9% as contractors and exporters got a boost from support coming from Japan's main opposition leader, Shinzo Abe, for public spending and more monetary easing. Hong Kong's Hang Seng slid by 1.55%.
Gold for December delivery settled down $16.30 at $1,713.80 an ounce at the Comex division of the New York Mercantile Exchange, while January crude oil contracts lost 97 cents to close at $85.87.
The benchmark 10-year Treasury was up 1/32, diluting the yield to 1.591%. The dollar was down 0.05%, according to the U.S. dollar index.
In corporate news, PetSmart(:PETM) shares tacked on 4.1% after the pet supplies retailer hiked its full-year profit forecast after exceeding third-quarter earnings by 12 cents and booking consensus-topping same-store sales numbers.
Limited Brands(:LTD) shares fell 2.4% after the specialty retailer offer a revised full-year guidance that was below consensus expectations.
BP (:BP) American Depositary Receipts rose 0.35% after the oil behemoth said Thursday it's in advanced talks with the U.S. Department of Justice and the Securities and Exchange Commission about settling criminal and other claims from the Deepwater Horizon explosion in 2010.
Target(:TGT) shares rose 1.7% after the retailer reported third-quarter earnings that beat estimates by 12 cents and provided an upbeat outlook on the holiday shopping season. Revenue rose less than expected as sales growth slowed at stores open at least a year.
NetApp(:NTAP), the maker of storage and data management software, delivered a solid beat in its fiscal second quarter on Wednesday and also provided a robust outlook. Shares surged 11.2%.
Viacom(:VIAB) shares advanced 2.6% after the entertainment content company beat quarterly earnings estimates by 4 cents a share. Revenue came in a bit below expectations driven partly by a decline in filmed entertainment sales.
Diamond Foods(:DMND) shares plummeted 21.2% after the company restated its financial results for the 2010 and 2011 fiscal years, following its massive accounting scandal, wiping out $56.5 million in earnings. The company also indicated much weaker profit for the first three quarters of 2012.
--Written by Andrea Tse and Joe Deaux in New York.
>To contact the writer of this article, click here: Andrea Tse.