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Economically-sensitive stocks took the hardest hit as Wall Street skidded on Thursday as traders reviewed mixed data and earnings. 

Today's Markets

As of 12:25 p.m. ET, the Dow Jones Industrial Average fell 198 points, or 1.2%, to 16417, the S&P 500 dipped 24.7 points, or 1.3%, to 1864 and the Nasdaq Composite tumbled 57.9 points, or 1.4%, to 4043.

Wall Street failed to hold record highs on Wednesday, falling solidly into the red after a reading on inflation came in markedly higher than economists expected. On Thursday, cyclical stocks,  were the biggest losers. Those sectors include consumer discretionary, energy, financials, health care and materials. Meanwhile, defensive plays like utilities and telecommunication stocks performed the best. 

Early on, the focus was on corporate news. Cisco (CSCO) revealed better-than-expected results, sending shares of the networking giant flying higher. However, Wal-Mart (WMT) posted a sizeable miss, blaming bad weather. Shares of the world's biggest retailer stumbled on the news. Both stocks are Dow components. 

In economic news, the Labor Department said the number of Americans filing for first-time unemployment benefits fell last week to 297,000 from an upwardly revised 321,000 the week prior. Wall Street was looking for claims to rise to 320,000 from an initially reported 319,000.

Another report from Labor showed prices for consumer goods rose 0.3% in April from the month prior, matching Wall Street’s estimates on a rounded basis. Excluding the food and energy components, prices rose 0.2%, slightly more than the 0.1% increase economists expected. The Federal Reserve has been working to boost inflation as it chops down unemployment. 

A report from the New York Federal Reserve showed manufacturing in the Empire State region surged in May, with its business conditions gauge jumping to 19.01 in May after nearly stalling at 1.29 in April. Economists expected a reading of 5. 

Meanwhile, the National Association of Home Builders’ gauge of homebuilder sentiment fell to 45 in May, from 46 in April, while Wall Street expected the gauge to rise to 49.

Last on the heavy economic calendar, the Philadelphia Fed’s gauge of manufacturing activity in the mid-Atlantic region rose to 15.4 in May from 16.6 the month prior. The May reading surpassed Wall Street’s expectations of 14.

The economy has been recovering from a harsh winter that swept across large swaths of the U.S. and severely suppressed activity. 

Elsewhere, U.S. crude oil futures fell 41 cents, or 0.4%, to $101.96 a barrel. Wholesale gasoline prices were little changed at $2.969 a gallon. Gold dipped 70 cents, or 0.05%, to $1,305 a troy ounce. 

Follow Adam Samson on Twitter @adamsamson.