NEW YORK — Stocks fell in early trading Thursday after China reported a sharp jump in inflation. Mixed U.S. economic news also held the market back.
Overseas markets were mixed after China said its inflation rate jumped 2.7 percent in February from 1.5 percent in January. Rapid inflation could force China to raise interest rates. That, in turn, could slow one of the world’s fastest-growing economies and put a damper on a global recovery.
Meanwhile, the Labor Department said workers filing for jobless benefits for the first time fell by 6,000 to a seasonally adjusted 462,000 last week. Economists were predicting a slightly bigger drop, forecasting new claims would fall to 460,000, according to Thomson Reuters.
But the market was unimpressed by the report. While it showed some easing of the labor market, it didn’t point to the increase in hiring that investors want to see. Stocks have traded in a narrow range since the Labor Department said on Friday that employers cut fewer jobs in February than analysts expected. The market is looking for more signs of progress.
The Commerce Department said the country’s trade deficit fell in January because of a big drop in imported oil and cars. U.S. exports dipped 0.3 percent. The drop in U.S. exports might give investors pause because a drop in overseas sales could slow the recovery.
In early morning trading, the Dow Jones industrial average fell 31.06, or 0.3 percent, to 10,536.27. The Standard & Poor’s 500 index dropped 4.06, or 0.4 percent, to 1,141.55, while the Nasdaq composite index fell 9.81, or 0.4 percent, to 2,349.14.
Corporate dealmaking continued Thursday. Oil company BP PLC will pay $7 billion to acquire exploration rights from Devon Energy Corp. BP will acquire rights to explore in Brazil, the U.S. Gulf of Mexico and Caspian Sea.
Increased mergers and acquisitions in recent weeks has been a positive sign that companies believe the economy is getting stronger.
