U.S. markets fall as Labor Department reports rising inflation, jobless claims

Jan. 13 (UPI) -- U.S. markets fell on Thursday as investors processed data showing rising inflation and an unexpected increase in unemployment claims.

The Dow Jones Industrial Average closed the day down 176.7 points, or 0.49%, while the S&P 500 dropped 1.42% and the tech-heavy Nasdaq Composite declined 2.51% as a rally among tech stocks fell flat.

On Thursday the Labor Department reported that the producer's price index rose by 0.2% in December and saw a 9.7% year-over-year increase in wholesale prices for the end of 2021, the largest increase on record in data dating back to 2010.

Additionally, in its weekly jobless claims report, the Labor Department reported about 230,000 workers filed first-time unemployment claims last week after initial jobless claims had been well under 250,000 for several weeks and even dipped below 200,000.

"The inflation picture obviously is something that people are trying to understand -- the concept of PPI and the fact that we're getting ... numbers that we haven't seen in quite some time," Omar Agular, Charles Schwab Asset Management CEO, told Yahoo Finance. "The labor market seems to continue to be very tight and very strong, and I think investors are trying to understand what the implications might be for the reaction of the central bank."

Major tech stocks led the market decline on Thursday as shares of Snap declined 10.18%, Tesla dropped 6.75%, Microsoft fell 4.23% and Amazon slid 2.42%. Virgin Galactic stock also plummeted 18.92% after announcing a debt offering.

Peter Boockvar of Bleakley Advisory Group noted that many tech stocks, which have been volatile to begin 2022 after the Federal Reserve said it would look to implement interest rate hikes to fight inflation, fell at around the same time in midday trading.

"When the Fed is not your friend, you sell rallies," Boockvar said.

Stocks saw some boost from positive earning reports as KB Home gained 16.52% after better-than-expected earnings and Delta stock rose 2.09% after the airline said it still expects to turn a profit for the year.