On the economic news front, the Labor Department said weekly applications for unemployment benefits dropped by 4,000 to 339,000. The Conference Board is expected to release its March leading economic indicators, and the Philadelphia Federal Reserve is due to report on regional manufacturing activity. In the first hour of trading, the Dow Jones industrial average fell 42.26, or 0.33%, to 12,761.58. The Standard & Poor''s 500 index fell 7.42, or 0.50%, to 1,465.08. The S&P hit a new 6 1/2-year high Wednesday. The Nasdaq composite index fell 20.16, or 0.80%, to 2,490.34. Bond prices rose for the fourth straight session, with the yield on the benchmark 10-year Treasury note falling to 4.64% from 4.66% late Wednesday.

Initial jobless claims fell by 4,000.
The Department of Labor released its report on initial jobless claims in the week ended April 14 on Thursday, showing that jobless claims fell less than economists had been expecting after surging higher in the previous week. The report showed that jobless claims fell to 339,000 from the previous week''s revised figure 343,000. Economists had expected jobless claims to fall to 320,000 compared to the 342,000 originally reported for the week ended April 7. The modest decrease came after jobless claims surged higher in the previous week, rising to 343,000 from 323,000 in the week ended March 31. The Labor Department also said that the less volatile four-week moving average rose to 328,750 from the previous week''s revised average of 323,500. The report also showed that continuing claims in the week ended April rose to 2.531 million from the preceding week''s revised level of 2.525 million.


9:30AM FTSE 100 declines Thursday on heavy losses in Asian markets.
The UK market was lower on Thursday. By mid-day, the FTSE 100 42.7 points, or 0.7%, lower to 6,406.0.

Advancers

Mid-cap WH Smith led the advancers, up 2.8%, supported by a 7% rise in first-half profit before tax. The book and stationery retailer announced that while it remained cautious about consumer spending in its markets, it was confident in the outcome for the full year.

Life assurer Prudential gained 0.6% after it reported an 8% increase in sales on an annual premium equivalent basis.

Defensive drug stocks also advanced, with GlaxoSmithKline up 0.7% and AstraZeneca 0.6% higher.

Decliners

Mining stocks, widely seen as a proxy for global and Chinese growth, were hit the worst, with Antofagasta down 2% and Kazakhmys 1.5% weaker. Rio Tinto was down 1.7% despite an upbeat production report.

Oil large-caps were also lower as the price of crude oil dipped below $63 a barrel. BP slid 1.1% while BG Group and Royal Dutch Shell both dropped 0.8%.

Fund managers were also weak as equities markets are under pressure. Amvescap fell 2.2%.

As the pound strengthened its position above the $2 mark for a third consecutive day, dollar earners continued to decline. BAE Systems, the defence group, lost 2.7%. Rexam, the aluminium can producer, gave up 2% and engine maker Rolls-Royce fell 2%.


9:15AM Asian stocks tumbled sharply Thursday on concern of interest rate hike in China.

Asian markets finished lower on Thursday. Japan Nikkei closed 1.7% lower, giving up 295.35 points, to 17,371.97, as consumer electronics group Sony shed more than 2.1%. export-related shares lost heavily. Canon shed 2.1%, Mazda Motor Corp fell 2.4% and Toyota Motor Corp was down 0.6%.

Other regional markets plunged as well. The Singapore Straits index fell 3.2% to 3,291.28, while Hong Kong Hang Seng index lost 2.3% to 20299.71. China Mobile, the world''s largest mobile-phone operator by users, slid 4.1 %. China Life Insurance Co., the nation biggest insurer, tumbled 3.4%.

Taiwan Weighted Price Index lost 1.4% to 7,888.63. Australian S&P/ASX 200 was down 1.2% to 6,148.30. BHP Billiton, the world largest mining company, dropped 2.6 %. Rio Tinto, the third largest, slid 2.3%. Seoul Kospi index shed 1.4% to 1,513.66 and Malaysian KLSE Composite ended down 1.7%. Shanghai Composite Index in China dipped 4.5%.

China first-quarter gross domestic product rose 11.1% from a year earlier and inflation last month accelerated to a two-year high of 3.3%, the statistics bureau announced in Beijing, after China market close. The market expected 10.4% GDP growth and inflation of 2.7%.