A weak forecast from Walmart (NYSE: WMT) and concerns about the effect of a change in Federal Reserve policies sent stock prices sharply lower Thursday.
The Dow Jones Industrial Average fell 225.47 points to 15,112.19. The Nasdaq Composite Index lost 63.16 point to 3,606.12 and the Standard & Poor’s 500 Index was down 24.07 points to 1,661.32.
For the day, the Nasdaq declined 1.72 percent, the Dow fell 1.47 percent and the S&P 500 was off 1.42 percent.
Shares of Walmart were down $1.99 to $74.41 after the company reported sales rose less than expected in the past quarter and it reduced its overall forecast for 2013.
The Department of Labor reported initial claims for jobless benefits fell 15,000 in the past week to 320,000, the lowest level in nearly six years. The report was considered an omen that the Fed may begin to taper the bond-buying program as early as September.
Money leaving the stock market flowed to gold Thursday, taking the metal up $27.50 an ounce to $1,360.90. Silver rose $1.14 to $22.93 an ounce. Oil prices rose 48 cents to $107.33 a barrel.
All 10 major industries in the S&P 500 retreated, with technology and consumer-discretionary shares dropping more than 1.7 percent. Gannett Co. (NYSE: GCI) tumbled 5.1 percent after Warren Buffett’s Berkshire Hathaway Inc. (NYSE: BRK.B) exited its stake in the newspaper publisher. Gannett, which has proposed buying Belo Corp., (NYSE: BLC) slid 5.1 percent to $24.29.
Homebuilders rallied as confidence in the industry rose to the highest level since 2005 despite rising mortgage rates.
About 6.6 billion shares exchanged hands on U.S. exchanges today, 4.5 percent above the three-month average. Treasury yields rose to the highest levels in two years.
Industrial production in the U.S. was unchanged in July. Separate Fed reports showed manufacturing in the Philadelphia and New York regions expanded in August at a slower-than- anticipated pace.
The Fed, led by Chairman Ben Bernanke, will probably reduce its $85 billion in monthly bond purchases at its meeting Sept. 17 and 18, according to 65 percent of economists surveyed by Bloomberg from Aug. 9 to Aug. 13.
Turmoil in Egypt is also weighing on markets. Hundreds of supporters of ousted President Mohamed Morsi torched government headquarters in Giza, as the death toll rose above 500 after a crackdown on Islamists calling for his reinstatement.
Thursday’s decline broke a monthlong fluctuation for the S&P 500 and ended the calmest trading period in six months. The benchmark index was confined to a 35-point range from July 11 through Wednesday, with intraday price changes averaging 0.68 percent over the past 30 days, the smallest swing over a comparable period since Feb. 19, data compiled by Bloomberg show.
Cisco (Nasdaq: CSCO) sank 7.2 percent to $24.49 as the biggest maker of networking equipment said revenue for the current quarter through October will be $12.2 billion to $12.5 billion.
Semiconductor companies tumbled 2.3 percent as a group. Micron Technology Inc. (Nasdaq: MU) dropped 4.7 percent to $14.13. Advanced Micro Devices Inc. (NYSE: AMD) slid 3.4 percent to $3.69.
Automotive stocks fell the most among 24 industries in the S&P 500. Ford Motor Co. (NYSE: F) retreated 2.7 percent to $16.43. Delphi Automotive Plc (NYSE: DLPH) slid 2.4 percent to $54.20 after filings showed a selloff of shares as of June 30 by holders including David Einhorn’s Greenlight Capital Inc., Dan Loeb’s Third Point LLC, John Paulson’s Paulson & Co. and Paul Singer’s Elliott Management Corp.
Onyx Pharmaceuticals Inc. (Nasdaq: ONXX) declined 7.2 percent to $115.34. Talks over Amgen Inc.’s (Nasdaq: AMGN) proposed takeover of the maker of blood-cancer medication have stalled over a dispute about access to data from an ongoing drug trial, even as the two sides have a general agreement on price, said people familiar with the matter.
Hewlett-Packard Co. (NYSE: HPQ) retreated 4.5 percent to $25.95. Rival Lenovo Group Ltd. reported first-quarter profit that beat analyst estimates after increasing its global market share for tablet computers, smartphones and personal computers.
An S&P index of homebuilders rallied 4.4 percent, reversing an earlier decline of as much as 3.3 percent. Confidence in the industry rose in August to the highest level since 2005, a report showed Thursday, as demand for new homes supports the market amid rising mortgage rates.
D.R. Horton Inc. (NYSE: DHI) climbed 5.7 percent to $19.12, halting an eight-day decline. PulteGroup Inc. (NYSE: PHM) surged 5.3 percent to $15.91. KB Home (NYSE: KBH) rose 5.3 percent to $17.21. Lennar Corp. (NYSE: LEN) increased 5.1 percent to $33.28.
Newmont Mining Corp. (NYSE: NEM) gained 4 percent to $33.22 after gold futures jumped to an eight-week high as demand for the metal as an alternative investment increased.
Kohl’s Corp. (NYSE: KSS) surged 5.3 percent to $53.51. The third-largest U.S. retailer forecast sales for this quarter that beat some analysts’ estimates.
— Bloomberg contributed to this report.