Stocks sagged Thursday as lower-than-expected activity in the manufacturing sector and a slight rise in weekly jobless claims stifled investor enthusiasm after two days of gains. The Dow Jones industrial average dropped more than 100 points, while tech stocks fell on concerns about Intel and Yahoo.
The decline did not alarm analysts too much, as trading volume was low in advance of the Independence Day weekend. After the market's muted reaction to a widely expected rise in interest rates on Wednesday, many investors were looking ahead to the government's monthly labor report, due Friday.
The Dow tumbled 101.32, or 1.0 percent, to 10,334.16. The Nasdaq composite index sank 32.24, or 1.6 percent, to 2015.55, largely on weakness in the semiconductor sector. The Standard & Poor's 500-stock index fell 11.90, or 1.0 percent, to 1128.94.
The Labor Department found a slight rise in the number of people who signed up for jobless benefits last week; economists had forecast a decrease in claims. Separately, the Institute for Supply Management said its manufacturing index declined to 61.1 in June, down from 62.8 in May. The new reading was somewhat lower than the 61.5 forecast by analysts. Still, the gauge has been above 50 since June of last year, indicating that manufacturing activity is still in an expansion.
A negative remark from Morgan Stanley on chip bellwether Intel pressured the tech sector. Intel fell 58 cents, to $27.02, after an analyst with the brokerage house said the midpoint of its third-quarter revenue outlook might not match estimates. Yahoo declined $2.10, to $34.30, after Smith Barney cut its rating to a "hold" from a "buy," saying the stock had become too expensive, having climbed 63 percent since mid-March.
Cardinal Health slumped $17.19, or 24.5 percent, to $52.86, after the company said earnings for its just-completed fiscal year would miss forecasts. Several brokerages downgraded the pharmaceuticals wholesaler, which also disclosed that state investigators have joined a federal probe of its accounting practices.
* The New York Stock Exchange composite index fell 58.23, to 6544.76; the American Stock Exchange index fell 3.89, to 1245.93; and the Russell 2000 index of smaller-company stocks fell 9.09, to 582.43.
* Declining issues outnumbered advancing ones by 4 to 3 on the NYSE, where trading volume rose to 1.49 billion shares, from 1.47 billion on Wednesday. On the Nasdaq Stock Market, decliners outnumbered advancers by 9 to 4 and volume totaled 1.73 billion, up from 1.71 billion.
* The price of the Treasury's 10-year note rose $1.56 per $1,000 invested, and its yield fell to 4.56 percent, from 4.59 percent on Wednesday.
* The dollar fell against the Japanese yen and rose against the euro. In late New York trading, a dollar bought 108.19 yen, down from 108.83 late Wednesday, and a euro bought $1.2177, down from $1.2185.
* Light, sweet crude oil for August delivery settled at $38.74, up $1.69, on the New York Mercantile Exchange.
* Gold for current delivery rose to $396.00 a troy ounce, from $392.60 on Wednesday, on the New York Mercantile Exchange's Commodity Exchange.