The financial markets moved lower Thursday as investors reacted to economic reports showing little evidence of expansion.
The Dow Jones Industrial Average fell 42.47 points to 13,944.05. The Nasdaq Composite Index dropped 3.35 points to 3,165.13 and the S&P 500 Stock Index was down 2.73 points to 1,509.39.
The Department of Labor reported initial claims for jobless benefits declined by 5,000 in the past week to 366,000. And the productivity of U.S. companies declined by 2.0 percent in the last quarter of 2012, the biggest decline in two years.
Commodities followed stocks lower. Gold dropped $7.50 to $1,671.30 an ounce and oil slipped 79 cents to $95.86 a barrel.
Sprint Nextel Corp. (NYSE: S) fell 0.5 percent as the third-largest U.S. wireless carrier reported a drop in monthly contract subscribers. Akamai Technologies Inc. (Nasdaq: AKAM) tumbled 15 percent after its forecast missed estimates. Apple Inc. (Nasdaq: AAPL) rallied 3 percent as the iPhone maker said its management team and board of directors have been in “active” talks to return more cash to holders after David Einhorn urged the company to do so.
“We’ve moved so far so fast that the market’s just looking for any kind of sign to take something off the table,” Mark Freeman, who oversees about $14.1 billion as chief investment officer at Westwood Holdings Group Inc. (NYSE: WHG) in Dallas, said in a phone interview. “The market really needs a positive catalyst to take it higher.”
The S&P 500 has rallied 5.8 percent in 2013 as U.S. lawmakers reached a budget compromise and companies reported better-than-estimated earnings. The benchmark equity gauge is about 3.6 percent below its record high reached in October 2007. It has more than doubled since bottoming in March 2009 as the Federal Reserve conducted three rounds of bond-buying to lower interest rates and boost economic growth.
Stocks worldwide fell after European Central Bank President Mario Draghi signaled policy makers are concerned the euro’s advance could damp inflation and hamper an economic recovery.
“The exchange rate is not a policy target, but it is important for growth and price stability,” Draghi said at a press conference in Frankfurt Thursday after the ECB kept its benchmark rate at a record low of 0.75 percent. “We want to see if the appreciation is sustained, and if it alters our assessment of the risks to price stability.”
Teradata Corp. (NYSE: TDC) tumbled 7.1 percent to $61.82. The data- storage software company forecast profit this year will be between $3.05 and $3.20 a share, compared with analysts’ average estimate of $3.15.
News Corp. (Nasdaq: NWSA) slipped 2.3 percent to $27.56 after cutting its profit outlook because of declining ratings for shows such as “American Idol” and “X Factor.” The media company said operating income will grow by a “mid-to high-single-digit” percentage for the fiscal year ending in June, down from an earlier forecast of growth that could exceed 10 percent.
Prudential Financial Inc. (NYSE: PRU) dropped 2.8 percent to $56.90 after posting a fourth-quarter loss on costs tied to fluctuation of currencies including the yen, which tumbled versus the dollar in the fourth quarter.
Yelp Inc. (NYSE: YELP) lost 4.6 percent to $21.35. The website reported a wider fourth- quarter loss than analysts estimated as it boosted spending on expansion into new markets.
Retailers fell even after reporting monthly same-store sales gains. Gap Inc. (NYSE: GPS) lost 3 percent to $32.23. The apparel chain boosted sales 8 percent last month, double the average estimate of 4 percent. Limited Brands Inc. (NYSE: LTD) erased 3.3 percent to $45.68 even after posting a 9 percent gain in same- store sales, or almost three times the average projection.