By Carla Mozee

Four sessions of consecutive advances by Latin American equities came to an end Thursday as investors sifted through another round of poor economic data from the U.S. and took gains off the table.

Brazil's Bovespa fell 1.5% to 39,638.42, a day after a 3.9% surge. Mexico's IPC fell 3% to 19,537.05.

On Wall Street, the Dow Jones Industrial Average (DJI) dropped 2.7% and the S&P 500 Index (SPX) fell 3.3%.

Regional stocks were hammered alongside Wall Street after layoff announcements continued to pile up. Coffee retailer Starbucks Corp. (SBUX) and Eastman Kodak Corp. (EK) were among the companies that said it will cut thousands of jobs in a bid to reduce costs to help offset the impact of the economic recession.

Separately, the Labor Department said continuing jobless claims rose by 159,000 last week to a seasonally adjusted 4.78 million, the most since the government began keeping track in 1967. Also, new claims for state unemployment benefits rose by 3,000 last week to 588,000.

The numbers come a day before Friday's much-anticipated December jobs report. Economists polled by MarketWatch expect a loss of 524,000 jobs.

Figures for December sales of new homes were also grim, with the Commerce Department estimating sales fell 14.7% to a record low of 331,000. Orders for durable goods also fell, by 2.6%, the fifth consecutive month of declines.

"The chilly economic climate and dicey credit conditions have sunk demand for business equipment and big-ticket consumer goods," said Sal Guatieri, a senior economist at BMO Capital Markets, in a note Thursday.

Mexico's central bank this week forecast an economic contraction for 2009 as demand from the U.S. weakens. Mexico exports more than 80% of its products to its northerly neighbor.

In trading, shares of consumer durable companies, retailers and manufacturers were all dragged lower. Home builders led decliners, with shares of Urbi down 9.6% and Homex (HXM) down 7.4%.

Shares of Wal-Mart de Mexico (WMMVY) slumped 2.9% and industrial conglomerate Alfa lost 8%.

Stock in Cemex (CX) declined 6.3% ahead of an expected tumble in the cement maker's fourth-quarter results. On Wednesday, its shares climbed 5.5% after the company said it completed debt renegotiations with its lenders.

Utilities and home builder Gafisa (GFA) were among the only advancers in Sao Paulo. Shares of electricity provider Cemig (CIG) rose 0.7% and Eletrobras edged up 0.2%. Gafisa shares rose 1.8%.

Steel stocks were under pressure after UBS Pactual cut its earnings estimate for Latin American steelmakers, citing its expectation for domestic prices declines in Brazil and downward volume revisions for 2009 and 2010.

"We believe steel stocks have hit bottom after a substantial de-rating from peak valuation levels by mid-2008," said UBS Pactual in a research note. "Looking forward, we do not see fundamentals supporting a strong re-rating of the sector."

The broker also said it continues to like buy-rated Gerdau (GGB) "due to its more attractive growth potential and exposure to infrastructure."

Argentina's Merval fell 1.3% to 1,086.06.

Late Wednesday, the government reached a deal with local banks that renegotiates the terms of more than 15 billion Argentinean pesos ($4.3 billon) worth of debt. President Cristina Fernandez de Kirchner reportedly called the 97% acceptance rate of its debt-swap plan an "unprecedented success."

The government had offered holders of 60% of 15.1 billion pesos of domestic guaranteed loans to swap into five-year, tradable bonds. The notes will pay a 15.4% fixed-rate during the first year.

The move will likely generate debt-servicing savings of up to $1.5 billion in payments in 2009, said Eurasia Group on Thursday.

The risk-consultancy group wrote Thursday that while the debt-swap has "clearly improved' Argentina's financing picture, "it does little to address what promises to be one of the main challenges facing the government in 2009: the need to obtain more than $6 billion dollars to cover dollars denominated debt obligations."

Chile's IPSA slipped 0.3% to 2,562.98, putting an end to its five-day run of gains.

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