us stocks slumped for a third straight session thursday as investors weighed mixed signals on the strength of the economy and digested another round of corporate earnings reports for more signs of the pace and scope of future federal reserve interest rate increases on wednesday the dow fell more than 600 points or 18 while the sp 500 shed 16 and the nasdaq composite declined 12 the sp 500s decline was its biggest since dec 15 chopping its gain for the year to just 23 stocks extended their slide on thursday with the dow jones industrial average slumping for three consecutive sessions this week with investors keying in on further signs of a weakening us economy good news for the economy also appeared to be bad news for stocks this week firsttime claims for unemployment benefits unexpectedly fell by 15000 to 190000 in the seven days ending jan 14 the lowest reading since september construction on new us homes fell a seasonally adjusted 14 in december to 138 million the commerce department said thursday this mornings data illustrates that the increasingly darkening cloud of weakening economic data has a silver lininga persistently strong labor market said josé torres senior economist at interactive brokers torres thinks unemployment claims show that its a job seekers labor market despite highprofile tech layoffs employers are still hesitant to lay off workers due to a tight labor market low labor participation and the nation having 18 job openings for every unemployed individual he said data on wednesday showed december retail sales dropped 11 contracting for the second month in a row meanwhile industrial production slumped 07 in december in the biggest monthly decline since september 2021 what just some weeks ago would have seen markets cheering the weaker data as it would have suggested correctly that the feds aggressive rate hike campaign is doing its job in tamping down the demand side of the economy is now being judged more harshly with bad news no longer enjoying a warm welcome by traders and investors alike said quincy krosby chief global strategist for lpl financial in a note see feds brainard interest rate policy will have to be restrictive for some time even with recent moderation of inflation federal reserve vice chairman lael brainard said on thursday that interest rate policy will have to be restrictive for some time even with the recent moderation of inflation susan collins the president of the boston fed also reiterated the need for the central bank to raise the policy rates further to get inflation on a steady downward path i anticipate the need for further rate increases likely to be just above 5 and then holding rates at that level for some time collins said in a speech to a conference on the future of the new england economy sponsored by her regional bank rates could rise perhaps at a slower pace collins said other fed officials set to speak thursday include vice chair lael brainard and new york fed president john williams st louis fed president james bullard and cleveland fed president loretta mester both reiterated on wednesday that they thought interest rates needed to go higher still to ensure inflation falls back to the central banks 2 target though dallas fed president lorie logan said the fed should slow down the pace of its interestrate hikes until more data shows where the economy is headed see us runs up against its debt limit so treasury starts using extraordinary measures heres what that means treasury secretary janet yellen confirmed to top us lawmakers in a letter that her department began to use extraordinary measures on thursday due to the federal government hitting its ceiling for borrowing she had indicated last week that such a move was coming of particular concern to equity bulls is that the sp 500 index failed to break decisively above the 4000 level and has been rebuffed again by its 200day moving average meaning the bear market downtrend remains intact a mixed fourthquarter earnings reporting season to date has also constrained bullish impulses over the past few weeks earnings expectations for the first quarter and the second quarter of 2023 switched from yearoveryear growth to yearoveryear declines said john butters senior earnings analyst at factset in a wednesday update expectations for both quarters have been falling over the past few months he added on june 30 the estimated earnings growth rate for q1 2023 was 96 and the estimated earnings growth rate for q2 2023 was 103 he said by sept 30 the estimated earnings growth rate for q1 2023 was 63 and the estimated earnings growth rate for q2 2023 was 51 as of wednesday the estimated earnings decline for q1 2023 is 06 and the estimated earnings decline for q2 2023 is 07 factset data show