U.S. stocks drop on earnings, mixed data; Dow falls 1.01%

U.S. stocks fell on Thursday after disappointing earnings and a mixed bag of data sent investors selling equities and jumping to the sidelines.

At the close of U.S. trading, the Dow 30 fell 1.01%, the S&P 500 index fell 0.94%, while the NASDAQ Composite index fell 0.76%.

The Federal Reserve Bank of Philadelphia said its manufacturing index ticked down to 15.4 this month from 16.6 in April, better than expectations for a 14.0 reading.

The data came after the U.S. Department of Labor said the number of individuals filing for initial jobless benefits in the week ending May 10 fell by 24,000 to 297,000 from the previous week’s revised total of 321,000. Analysts had expected jobless claims to fall by 1,000 to 320,000 last week.

Elsewhere, the New York Fed said its manufacturing index climbed to a two-plus-year high of 19.01 in May from a reading of 1.29 in April, far surpassing market calls for a rise to 5.00 this month.

On the other hand, U.S. industrial production dropped 0.6% last month, confounding expectations for a 0.1% rise, which spooked investors and sent share prices falling.

Separately, U.S consumer inflation rates came in better than expected as well, though concerns arose after investors digested the numbers.

The Bureau of Labor Statistics reported earlier that the U.S. consumer price index rose to 0.3% in April from 0.2% in March, in line with market expectations.

The U.S. core consumer price index, which excludes food and energy items, rose by 0.2% last month, more than the expected 0.1% uptick, after a 0.2% gain in March.

On Thursday, however, the producer price index came in much better than expected, and the consumer inflation rate's inability to maintain the same pace as its wholesale counterpart softened the dollar somewhat by stoking concerns surrounding the strength of U.S. demand for goods and services.

The U.S. producer price index increased by 0.6% last month, beating forecasts for a 0.2% gain, after rising 0.5% in March.

The core producer price index advanced 0.5% last month, compared to expectations for a 0.2% increase, after rising 0.6% in March.

Retailers Wal-Mart Stores Inc (NYSE:WMT) and Kohl's Corporation (NYSE:KSS) reported first-quarter numbers that disappointed investors, which further fueled concerns that demand in the U.S. remains soft.

Wal-Mart reported its smallest growth in quarterly sales in nearly five years though the retail giant blamed rough winter weather for the disappointing numbers.

Leading Dow Jones Industrial Average performers included Cisco Systems Inc (NASDAQ:CSCO), up 6.07% on a robust fourth-quarter revenue guidance, AT&T Inc (NYSE:T), up 0.37%, and Verizon Communications Inc (NYSE:VZ), which was down 0.09%.

The Dow Jones Industrial Average's worst performers included Wal-Mart Stores Inc (NYSE:WMT), down 2.43%, Chevron Corporation (NYSE:CVX), down 2.06%, and Goldman Sachs Group Inc (NYSE:GS), down 1.75%.

European indices, meanwhile, lower.

After the close of European trade, the DJ Euro Stoxx 50 fell 1.51%, France's CAC 40 fell 1.25%, while Germany's DAX fell 1.01%. Meanwhile, in the U.K. the FTSE 100 fell 0.55%.

On Friday, the U.S. is to round up the week with reports on building permits and housing starts, and a preliminary reading on consumer sentiment from the University of Michigan.