1:45 PM New York – U.S. market indexes declined after Cisco and Wal-Mart earnings some investors. Weekly jobless claims dropped to the lowest since October 2007 and consumer price index in July increased at a modest pace of 0.2%.
U.S. stocks traded lower and market indexes dropped more than 1% after weaker than expected earnings from Cisco and Wal-Mart.
S&P 500 index dropped 1.4% or 22.94 to 1,662.44 and the Nasdaq Composite Index declined 1.6% or 58.83 to 3,610.45.
Treasury bond yields rose to a 2-year high after employers eliminated fewest number of jobs in almost six years.
Weekly Jobless Claims Fall
Weekly jobless claims at the end of last week declined 15,000 to 320,000, the lowest initial claims since October 2007.
The Labor Department also revised initial claims in the previous week to 335,000 from its earlier estimate of 333,000.
Modest Rise in Consumer Price Index
In a separate report the department said consumer prices rose at a moderate rate last month.
Consumer price index increased 0.2% in July from the previous month, seasonally adjusted after rising 0.5% in June.
Core rate of inflation that excludes volatile food and energy prices decreased 0.2%, the third monthly decline in a row. For the year to the month, the core rate of inflation increased 1.7%.
Food and healthcare prices contributed to the largest increase in consumer prices but economists anticipate lower food prices on strong crop in fall.
Used cars and trucks prices declined 2.1% in July from a year ago and new vehicle prices increased 1.7% in the period.
U.S. Stocks in Review
Cisco Systems Inc (CSCO
) dropped 6% after the networking equipment maker estimated current quarter revenues between $12.2 billion and $12.5 billion, lower than expected.
The networking company also said it will eliminate 4,000 jobs in Japan, Europe and China on weaker sales.
Hewlett Packard Co (HPQ
) fell 3% after China based rival Lenovo Group Ltd reported increase in its worldwide market share for PCs, laptops, tablets and smartphones.
Onyx Pharmaceuticals Inc decreased 6% as the company’s merger plan with Amgen Inc stalled on the access to data linked to a drug trial according to several media reports.
Both companies declined to comment.
Wal-Mart Stores (WMT
) declined 2.2% after the world’s largest retailer lowered its estimate of adjusted earnings in the year of $5.10 a share from the earlier estimate in May of $5.20.