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US stocks fall on weak consumer spending

New York - US stocks tumbled in early trade on Thursday following lackluster consumer spending data and mostly disappointing corporate earnings news.

About 30 minutes into trade, the Dow Jones Industrial Average declined 115.59 points (0.69%) to 16 751.92.

The broad-based S&P 500 slumped 12.48 (0.64%) to 1 947.05, while the tech-rich Nasdaq Composite Index fell 26.23 (0.60%) to 4 353.46.

US consumer spending, which accounts for more than two-thirds of US economic activity, rose a mere 0.2% in May after a flat April.

Meanwhile, initial jobless claims, a sign of the pace of layoffs, totaled 312 000 in the week ending June 21, a decrease of 2 000 from the previous week in line with expectations.

"The domestic economic calendar today is failing to inspire gains" in stocks, said Charles Schwab & Co.

Homebuilder Lennar dipped 0.7% after earnings of 61 cents per share topped expectations by 10 cents. Lennar said business is "hitting on all cylinders" thanks to higher home prices.

But retailer Bed Bath & Beyond sank 9.6% as it projected second-quarter earnings of $1.08-$1.16 per share, below the $1.20 seen by analysts.

Consultancy Accenture lost 3.4 percent as it trimmed its 2014 profit forecast from $4.50-$4.62 per share to $4.50-$4.54.

Tobacco company Philip Morris lost 2.8% as it slashed its 2014 earnings forecast, citing major price discounting at "the low end" of the Australian market and "an improving but weak macro-economic environment in the EU," among other factors.

General Motors fell 1.5% as it ordered dealers to stop selling about 33 000 new and used Chevrolet Cruze sedans from model years 2013 and 2014 due to a potential problem with airbags.

The latest recall comes in the wake of the scandal over faulty ignitions tied to at least 13 deaths.

Aluminum producer Alcoa gained 2.2% after announcing a $2.9bn purchase of Firth Rixson, which makes aerospace jet engine components. Alcoa said the deal would boost its ability to win additional business in the aerospace sector.

Bond prices rose. The yield on the 10-year US Treasury fell to 2.53% from 2.56% Wednesday, while the 30-year dropped to 3.35% from 3.38%. Bond prices and yields move inversely.

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