Applications for unemployment benefits jumped to their highest level in six weeks, the U.S. Labor Department reported Thursday, while manufacturing slowed in the mid-Atlantic region.
The bright spot was applications for new construction, which reached a five-year peak, reinforcing "the patchy nature of the US economic recovery," Michael Hewson of CMC Markets said in a commentary.
Japan's Nikkei 225 index rose 0.6 percent to 15,119.53, reversing a lower opening. Australia's S&P/ASX 200 rose 0.5 percent to 5,189.70, pushed up by gains in BHP Billiton, the world's largest mining company. The stock rose 2.4 percent on bargain-hunting. Australia & New Zealand Banking Group rose 1.5 percent.
Benchmark in mainland China and Indonesia also rose while those in Taiwan, India, Singapore, New Zealand and the Philippines fell. Markets in Hong Kong and South Korea were closed for public holidays.
Evan Lucas of IG Markets in Melbourne said market declines could be explained by investors cashing in their gains following strong rallies. Japan's benchmark Nikkei 225 index has returned 45 percent so far this year. The Standard & Poor's 500 has delivered a terrific first four months. It's up 16 percent.
"There is always an uneasy feeling underlying the markets when they start making all-time highs," Lucas said.
Shares linked to gold, which has suddenly fallen afoul of investors like George Soros, dropped. Australia's Newcrest Mining was down 2.2 percent. Lao Feng Xiang, a Shanghai-listed major gold retailer, fell 0.9 percent.
Corporate earnings, which have been helping to power Wall Street to all-time highs, took a step back on Thursday after Wal-Mart, the world's largest retailer, reported a disappointing first-quarter profit and acknowledged a sales slump. Personal computer maker Dell posted dismal first quarter earnings.
Markets were also reacting to comments by John Williams, head of the Federal Reserve's San Francisco branch, who told an audience that the Fed could end its bond-buying program this year. But Williams' comments made clear that the Fed would only curtail its stimulus effort when the economy looked strong enough.
The Dow Jones industrial average fell to 15,233.22, a loss of 0.3 percent. The Standard & Poor's 500 dropped 0.5 percent to 1,650.47. Both indexes closed at record highs the day before. The Nasdaq composite index fell 0.2 percent to 3,465.24.
Benchmark oil for June delivery was down 30 cents to $94.87 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose 86 cents to $95.16 per barrel on the Nymex on Thursday.
In currencies, the euro fell to $1.2864 from $1.2907 late Thursday in New York. The dollar rose to 102.30 yen from 102.06 yen.
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