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Stocks were slammed on Thursday, with the Dow dropping 1 percent on a handful of negative economic reports, including lower industrial production, a dip in home builders' confidence in a recovery and rising consumer prices pointing to inflation in the economy.
A better-than-expected jobless claims report was overshadowed by disappointing earnings from several retailers, including Wal-Mart.
The Dow Jones Industrial Average, which fell over 100 points on Wednesday, closed unofficially down 167 points, or 1 percent, the S&P 500 fell 17 points, almost 1 percent and the Nasdaq lost 31 points.
Meanwhile, the 10-year yield broke below the psychologically-important 2.50 percent mark for the first time since last October.
"Volume is at its lightest of the year," noted Art Cashin, director of floor operations at UBS Financial Services. "We like to say 'volume is validity,' but that's not always true. A ship can sink in a quiet sea. That probably is a bit more ominous if we continue to go down as we have in light volume because it becomes evident that it's not heavy selling."
On the economic front, U.S. industrial output fell at its fastest rate in more than 1-1/2 years in April as factory production slumped, tempering hopes for a big jump in economic growth after a winter slowdown.
Production at the nation's mines, factories and utilities slipped 0.6 percent last month, the largest decline since August 2012, after an upwardly revised 0.9 percent gain in March, the Federal Reserve said.
And, after three months of holding out steady hope, sentiment among U.S. home builders weakened in May. A monthly index from the National Association of Home Builders slipped one point from a downwardly revised April figure. The index now stands at 45. Anything above 50 is considered positive sentiment.
On the positive side, weekly jobless claims declined 24,000 to a seasonally adjusted 297,000, according to the Labor Department. That was the lowest reading since May 2007 and brought claims back to their pre-recession level. Economists polled by Reuters had expected a reading of 320,000.
But, consumer prices ticked up 0.3 percent, recording their largest increase in 10 months in April, signaling some inflation in the economy. And industrial production in April slid 0.6 percent, versus estimates for a gain of 0.2 percent.
Among earnings, Wal-Mart shares fell over 2 percent after the retailer's first-quarter results missed Wall Street's estimates, and became the latest company to lay blame on the weather.
Smaller rival Kohl's dropped over 3 percent after posting earnings and revenue that fell short of Street estimates.