NEW YORK (Reuters) - Groundbreaking on new homes slid to the slowest pace in more than 10 years in the United States during July and factory activity in the Mid-Atlantic region stagnated in August, government reports showed on Thursday.þþThe slack economic data deepened Wall Street's recent malaise, with the Philadelphia Federal Reserve Bank's report on regional factories extending steep losses on U.S. stock markets and triggering downside trading curbs on the New York Stock Exchange.þþThe blue-chip Dow Jones industrial average fell as much as 2.67 percent before paring most of the day's losses and closing off 0.12 percent. It was its sixth straight decline.þþIn another sign of a slowdown, the number of U.S. workers seeking jobless benefits rose in the latest week, although the weekly figure is prone to fluctuations.þþHousing starts followed the longer-term trend of the sector and came in even worse than expected, falling 6.1 percent in July. Building permit activity, a sign of future construction plans, also sank.þþThe Philly Fed said its business activity index was at a weaker-than-expected 0.0 in August, showing no growth, versus 9.2 in July. A reading above zero indicates growth in the region's manufacturing sector. Economists polled by Reuters had forecast a reading of 9.0.þþÿThe economy is still cooling off a bit. It doesn't signal a decline in activity, but the better numbers we saw in spring are not continuing into the third quarter,ÿ said Gary Thayer, chief economist at A.G. Edwards and Sons, St. Louis.þþA move by Countrywide Financial Corp., the largest U.S. mortgage lender, to draw down an entire $11.5 billion credit facility, helped push Wall Street stocks lower. Prices for U.S. government debt rallied, pushing yields, which move inversely to prices, down sharply.þþThe Nasdaq Composite Index <.IXIC> closed down 0.32 percent but the Standard & Poor's 500 Index <.SPX> closed up 0.32 percent -- after both were down sharply earlier in the day.þþÿThere has been such intense focus on the U.S. housing sector that any signs of weakness and its global implications, one of the factors spilling over into other markets, adds to the nervousness,ÿ said David Watt, senior currency strategist at RBC Capital Markets in Toronto.þþThe Commerce Department said housing starts set an annual pace of 1.381 million units in July, lower than Wall Street forecasts of 1.405 million units and the upwardly revised 1.470 million rate for June. It was the lowest pace since the January 1997 rate of 1.355 million units.þþBuilding permits fell 2.8 percent in July to an annual pace of 1.373 million, the lowest since October 1996, when they reached 1.358 million. Economists polled by Reuters expected July permits at 1.400 million after 1.413 million in June.þþJuly's drop in housing starts was the worst in the South, where they fell 11 percent. Starts also fell in the West and in the Northeast, but rose in the Midwest.þþCompared with a year earlier, July home starts were off 20.9 percent and permits were down 22.6 percent.þþThe number of U.S. workers signing up for jobless benefits rose to 322,000 last week, Labor Department data showed. It was the highest level in two months but still pointed to a steady job market.þþEconomists polled ahead of the report were expecting the weekly claims level to inch down to a seasonally adjusted 313,000 for the week ended August 11, from 316,000 reported the prior week.þþFluctuations are common in this weekly data, particularly in the summer months. A Labor Department official said there were no special factors linked to the latest increase.þþRobert Brusca, chief economist at Fact and Opinion Economics in New York, said the numbers were not worrisome.þþÿRight now I would say this number doesn't mean anything. But it is an upswing, and you watch to keep an eye on that,ÿ Brusca said.þþThe four-week moving average, considered a better measure of employment conditions because it irons out the weekly gyrations, edged up to 312,500 from 307,750.þþ(Additional reporting by David Lawder and Joanne Morrison in Washington and Chris Reese in New York.)þþ
Source: NY Times
