Nasdaq drops 1 percent
NEW YORK, Feb. 21 (UPI) -- U.S. stock indexes dropped Thursday as investors pulled back on doubts about how long the Federal Reserve would continue with a liquidity program.
In meeting minutes released Wednesday, the Fed revealed divisions among members of the Open Market Committee about how to support the economic recovery.
Optimism was also tempered Thursday by a climb in first-time claims for unemployment benefits. The U.S. Labor Department said claims rose by 20,000 in the week to 362,000.
By close of trading, the Dow Jones industrial average was down 46.92 points or 0.34 percent to 13,880.62.
The Standard and Poor's 500 lost 9.53 points, or 0.63 percent, to 1,502.42 points.
The Nasdaq composite shed 32.92 points, or 1.04 percent, to 3,131.49 points.
On the New York Stock Exchange, 941 stocks advanced and 2,118 declined on a volume of 4.2 billion shares traded.
The 10-year U.S. treasury rose 9/32 to yield 1.981 percent.
Against the dollar the euro fell to $1.3194 from Wednesday's $1.3283. Against the yen, the dollar was lower at 93.06 yen from 93.56 yen.
In Tokyo, the Nikkei 225 closed at 11,309.13 points, dropping 159.15 points or 1.39 percent.
In London, the FTSE 100 index dropped 1.62 percent, 103.83 points, to 6,291.54.
Existing home sales rise slightly
WASHINGTON, Feb. 21 (UPI) -- U.S. sales of existing homes rose slightly in January over December, a trade group said Thursday.
Existing-home sales rose 0.4 percent month to month to a seasonally adjusted annual rate of 4.92 million from a downwardly revised annual rate of 4.9 million in December.
Sales for the month were 9.1 percent above the 4.51 million annual rate from January 2012, the National Association of Realtors said.
"Buyer traffic is continuing to pick up, while seller traffic is holding steady," said NAR Chief Economist Lawrence Yun.
"In fact, buyer traffic is 40 percent above a year ago, so there is plenty of demand but insufficient inventory to improve sales more strongly. We've transitioned into a seller's market in much of the country," Yun said.
The median sales price for existing homes rose on an annual basis for the 11th consecutive month -- the longest streak since July 2005 to May 2006, the association said.
The median price of $173,600 is 12.3 percent higher than in January 2012, the trade group said.
The total inventory of existing homes on the market fell 4.9 percent from December to 1.74 million, a 4.2-month supply at the current rate of sales.
The supply of homes for sale is the lowest it has been since April 2005, when homes on the market were also calculated to be a 4.2-month supply.
Yun said the inventory of homes for sale would likely rise in the spring, as it usually does. However, "it may be insufficient to avoid more frequent incidences of multiple bidding and faster-than-normal price growth," he said.
Mid-Atlantic manufacturing slows further
PHILADELPHIA, Feb. 21 (UPI) -- The Philadelphia Federal Reserve Bank said its key mid-Atlantic manufacturing index dropped in February after showing growth in late 2012.
The business survey, taken midway through the month, found the diffusion index of manufacturing activity fell from minus 5.8 in January to minus 12.5 in February.
The component index for new orders dropped from minus 4.3 to minus 7.8. Shipments, however, showed improvement with that index rising to 2.4.
The employment index also improved, with the index measuring the number of employees rising from minus 5.2 to 0.9, the first positive reading in eight months.
Manufacturing index shows resilience
NEW YORK, Feb. 21 (UPI) -- A general index of U.S. manufacturing activity slid January to February, but showed resilience in component indexes, a research firm said Thursday.
Markit Economics said the manufacturing sector's Purchasing Managers Index for the month in a flash estimate slipped from 55.8 in January to 55.2.
A flash estimate is based on 85 percent of the pertinent data being available. As such, the figure is subject to a revision.
While the general index slid from January's nine-month peak, a few component indexes remained strong, Markit said.
The production index, also known as the output index, posted the strongest rise since March 2011, climbing from 56.8 to 58.1. Stocks of finished goods also rose at a faster rate, the index rising from 50.4 to 51.2.
The indexes use 50 as a break-even point. Numbers above 50 indicate growth. Below 50, the numbers indicate contraction.
New export orders slipped from 51.5 in January to 48.7, falling into contraction, a likely development considering the ongoing recession in Europe, a critical trading partner.
The employment index remained positive, although growth slowed as the index dropped from 55.6 to 54.1.
"U.S. manufacturers reported the largest monthly rise in production for almost two years in February, suggesting that the economy is set to rebound from the weak patch seen late last year and allaying fears of a double-dip recession," said Markit Chief Economist Chris Williamson.
"The domestic market," he said, "is providing the main stimulus to growth, but weak demand in other countries caused export orders to fall slightly for the first time since October," he said.