Stocks fall after unemployment applications rise

NEW YORK - Stocks dipped Thursday after a report found that more people had applied for unemployment benefits last week.

First-time applications for unemployment benefits rose 35,000 from the week before to 445,000, the Labor Department said. That was the highest level since October and above what economists had predicted.

"It was a disappointing number," said Kim Caughey Forrest, an analyst at Fort Pitt Capital.

The Dow fell 23.54 points, or 0.20 percent, to 11,731.90. The Standard & Poor's 500 lost 2.20, or 0.17 percent, to 1,283.76. The Nasdaq composite lost 2.04, or 0.07 percent, to 2,735.29.

Losses were spread across the market. Seven of the 10 company groups that make up the S&P 500 fell. Materials companies had the largest move, falling 0.8 percent.

Merck & Co. fell 6.6 percent to $34.69 after announcing that clinical trials of its cardiovascular drug vorapaxar would be discontinued for some patients. Merck fell the most among the 30 stocks in the Dow Jones industrial average. Home Depot Inc., which gained 1.3 percent, led the index.

Whole Foods Market Inc. jumped 4.6 percent to $52.31 after an analyst said shares would continue to rise because the company's customers were willing to pay higher costs for food. The company is up nearly 80 percent over the last year.

The Labor Department also reported Thursday that wholesale prices in December had risen by the largest amount in nearly a year, as a result of higher energy and food costs. Most other prices rose only slightly, suggesting inflation isn't spreading through the economy.

A decline in the dollar helped limit stock losses. The dollar lost 1.1 percent against an index of six currencies after successful bond auctions by Spain and Italy pushed the euro higher. The dollar's slide helps U.S. companies that rely on exports by making their prices more competitive overseas.

The U.S. trade deficit edged down to the lowest point in 10 months as exports, helped by a weaker dollar and rising foreign demand, climbed to the highest level in more than two years.

The trade deficit narrowed to $38.3 billion in November, down 0.3 percent from October's revised $38.4 billion deficit, the Commerce Department reported Thursday.

After the market closed, Intel Corp. reported that its income had risen 48 percent last quarter. That easily beat analyst estimates. The stock was up nearly 3 percent in after-hours trading.

Bond prices rose, pushing their yields lower. The yield on the 10-year Treasury note fell to 3.30 percent from 3.35 percent late Wednesday. That yield is used to set interest rates on many kinds of loans including mortgages.

Four shares rose for every three that fell on the New York Stock Exchange. Consolidated volume came to 4.4 billion shares.