U.S. stocks fall on data, talk of Fed policy shift; Dow loses 0.34%

Investing.com - U.S. stocks finished lower on Thursday after weekly initial jobless claims jumped up more than expected last week.

Stocks continued to come under pressure from the Wednesday release of the Federal Reserve's minutes from its latest monetary policy meeting, which revealed more and more policymakers may be considering winding down monetary stimulus policies.

At the close of U.S. trading, the Dow Jones Industrial Average finished down 0.34%, the S&P 500 index ended down 0.63%, while the Nasdaq Composite index fell 1.04%.

The Department of Labor reported earlier that the number of individuals filing for initial jobless claims in the week ending Feb. 16 rose by 20,000 to 362,000, surpassing market calls for an increase of 13,000 to 355,000.

The numbers sparked fears the U.S. economy still faces headwinds and sparked a round of profit-taking that sent investors chasing safe-harbor dollar positions.

Also in the U.S., the Federal Reserve Bank of Philadelphia said that its manufacturing index fell to -12.5 in February from January’s reading of -5.8, the sharpest contraction since July.

Analysts were hoping for a gain into positive territory at 1.0.

Investors shrugged off firming U.S. housing data.

The National Association of Realtors reported earlier that existing home sales jumped up 0.4% to a seasonally adjusted 4.92 million units in January, up from December’s revised total of 4.90 million units.

Analysts had expected U.S. existing home sales to hold steady at 4.90 million units in January.

Elsewhere in the U.S., the country's monthly consumer price index remained unchanged in January.

The core inflation rate, stripped of volatile food and energy prices, rose 0.3%, outpacing market expectations for a 0.2% reading and above December's 0.1% reading, which fueled already brewing market talk that the Federal Reserve may be closer to winding down monetary stimulus tools that weaken the dollar to spur recovery.

The Fed is currently running a monthly USD85 billion bond-buying program, known as quantitative easing, and has said interest rates will stay near zero until the unemployment rate drops to around 6.5% from 7.9% today.

In the past, most members supported such ultra-loose policies to varying degrees, which weaken the dollar to spur recovery, though broad support may be waning now that the economy has shown more signs of recovery.

The minutes released on Wednesday revealed that some monetary authorities may want to consider modifying stimulus policies before reaching employment and other goals in order to focus more on controlling inflation as the economy improves.

Leading Dow Jones Industrial Average performers included Hewlett-Packard, up 2.34%, Boeing, up 1.70%, and Wal-Mart Stores, up 1.55%.

The Dow Jones Industrial Average's worst performers included Bank of America, down 3.22%, Home Depot, down 3.12%, and Intel, down 2.32%.
European indices, meanwhile, finished lower.

After the close of European trade, the EURO STOXX 50 fell 2.29%, France's CAC 40 also fell 2.29%, while Germany's DAX 30 finished down 1.880%. Meanwhile, in the U.K. the FTSE 100 finished down 1.62%.