NEW YORK, Sep. 24, 2009 (Xinhua News Agency) -- Wall Street erased early gains and fell Thursday, as sales of existing homes unexpected slumped last month.

The National Association of Realtors said existing home sales dropped 2.7 percent in August, the first time in four months. D.R. Horton (NYSE:DHI) led declines in homebuilders.

The negative reading on the housing market overshadowed better- than-forecast jobs data.

The U.S. Labor Department said the number of newly laid off workers seeking unemployment benefits fell for a third week in a row. Initial claims for unemployment insurance fell by 21,000 last week to 530,000, better than the 550,000 economists had expected.

The number of people continuing to claim benefits for more than a week also fell, dropping 123,000 to 6.14 million.

The Dow Jones fell 44.89 to 9,703.66. Broader indexes also went lower. The Standard & Poor's 500 index slipped 9.33 to 1,051.54 and the Nasdaq fell 25.05 to 2,106.37.