After seeing modest strength earlier in the session, stocks came under pressure going into the close of Thursday. A disappointing batch of U.S. economic data weighed on the markets along with comments from a Federal Reserve official.
The major averages ended the day in negative territory, with the Dow and the S&P 500 pulling back off record highs. The Dow dipped 42.47 points or 0.3 percent to 15,233.22, the Nasdaq edged down 6.37 points or 0.2 percent to 3,465.24 and the S&P 500 fell 8.31 points or 0.5 percent to 1,650.47.
The lower close on Wall Street came on the heels of the release of several disappointing economic reports, including a report from the Labor Department showing a bigger than expected increase in initial jobless claims in the week ended May 11th.
The report said initial jobless claims rose to 360,000, an increase of 32,000 from the previous week's revised figure of 328,000. Economists had expected jobless claims to climb to 330,000.
The Philadelphia Federal Reserve also released a report showing an unexpected contraction in regional manufacturing activity in May.
The report showed that the index of current activity fell to a negative 5.2 in May from a positive 1.3 in April, with a negative reading indicating a contraction in regional manufacturing activity. The drop came as a surprise to economists.
A separate report from the Commerce Department showed that housing starts tumbled 16.5 percent to a seasonally adjusted annual rate of 853,000 in April.
On the other hand, the report also showed that building permits, an indicator of future housing demand, jumped 14.3 percent to an annual rate of 1.017 million in April.
The Labor Department also released a report showing that consumer prices fell by slightly more than expected in April amid a sharp drop in energy prices.
Further selling pressure was generated late in the day by comments from San Francisco Federal Reserve President John Williams, who suggested that the Fed may slow the pace of its asset purchases as early as this summer if various labor market indicators continue to register appreciable improvement.
Disappointing quarterly results from Wal-Mart (WMT) also weighed on the markets, with the retail giant falling by 1.7 percent on the day.
Earlier in the day, the markets were supported by a positive reaction to earnings news from networking giant Cisco (CSCO), which reported better than expected fiscal third quarter results after the close of trading on Wednesday.
Adding to the positive sentiment, Cisco Chairman and CEO John Chambers indicated that the company is starting to see some encouraging signs in the U.S. and other parts of the world.
Despite the pullback by the broader markets, shares of Cisco surged up by 12.6 percent to their best closing level in well over two years.
Sector News
Biotechnology stocks showed a substantial move to the downside on the day, giving back ground following recent strength. The NYSE Arca Biotechnology Index tumbled by 2 percent, pulling back further off Tuesday's record closing high.
Celgene (CELG) and Regeneron (REGN) turned in two of the biotech sector's worst performances, falling by 4.7 percent and 3.5 percent, respectively.
Significant weakness also emerged among housing stocks, resulting in a 1.7 percent drop by the Philadelphia Housing Sector Index. The disappointing housing starts report inspired traders to cash in on some of the recent strength in the sector.
Steel, retail, and pharmaceutical stocks also came under pressure over the course of the session, while networking and computer hardware stocks held on to strong gains.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Thursday. While Japan's Nikkei 225 Index pulled back by 0.4 percent, Hong Kong's Hang Seng Index edged up by 0.2 percent.
The major European markets also ended the day mixed, showing only modest moves. The German DAX Index inched up by 0.1 percent, while the U.K.'s FTSE 100 Index and the French CAC 40 Index both dipped by 0.1 percent.
In the bond market, treasuries moved sharply higher on the heels of the disappointing economic data. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 7.8 basis points to 1.865 percent.
Looking Ahead
Earnings news may impact trading on Friday, with Dell (DELL), J.C. Penney (JCP), and Applied Materials (AMAT) among the companies releasing their quarterly results after the close of today's trading.
Meanwhile, the economic calendar for Friday is relatively quiet following today's slew of data, although traders are likely to keep an eye on reports on consumer sentiment and leading economic indicators.
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Market Analysis
June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.