The Conference Board's index of leading economic indicators, released Thursday, signaled economic weakness with a 0.3 percent decline in June, more than the 0.1 percent analysts were expecting. The index had risen 0.2 percent in May after dropping 0.2 percent in April.

The report is designed to forecast economic activity over the next three to six months.

"The leading index has slowed in recent months, suggesting a possible softening of the overall pace of economic activity later in the second half of this year," the Conference Board's labor economist, Ken Goldstein, said in a statement accompanying the report.

Wall Street, meanwhile, focused on upbeat earnings reports to send the Dow Jones industrials to their first close above 14,000. The Standard & Poor's 500 index also had a record close.

The Dow rose 82.19, or 0.59 percent, to 14,000.41. The S & P index advanced 6.91, or 0.45 percent, to 1,553.08, while the Nasdaq composite index rose 0.76 percent to 2,720.04.

The Conference Board report tracks 10 economic indicators. The index was dragged down in June by a drop in building permits as well as unemployment claims, consumer expectations, vendor performance and interest rate spread.

The positive contributors were weekly manufacturing hours, new orders for non-defense capital goods and stock prices. Manufacturers' orders for consumer goods and materials and real money supply held steady.

While the report captures the weakness in the housing market, it fails to reflect the economy's bright spots, said Brian Bethune, an economist with Global Insight.

"It's not picking up the strength of the global economy, the momentum of corporate profits driven by overseas sales and employment conditions," Bethune said.

That should offset some of the weakness in the housing sector, he said.

Also Thursday, the Labor Department reported that jobless claims dropped last week to the lowest level in two months.