Stocks fell on Thursday as persistent concerns about unemployment and consumer spending were underscored by an unexpected rise in initial jobless claims and July retail sales that were mostly weaker than expected.
Government data showed initial claims for jobless benefits rose to 479,000 last week, defying analysts' expectations for a dip from the previous week. The report added to caution a day before Friday's critical monthly jobs report and eroded some of the optimism created on Wednesday, when the ADP report showed private employers added more jobs than expected in July.
Claims have been maddeningly stubborn to come down, and that could make for a rough tomorrow, said Bruce Zaro, chief technical strategist at Boston's Delta Global Advisors.
Economists polled by Reuters are expecting Friday's U.S. Labor Department report to show a drop of 65,000 in non-farm payrolls in July as temporary U.S. Census Bureau jobs dried up. Private employers are expected to have added 90,000 jobs.
Weakness in consumer spending trends also stayed in focus as most retailers reported July same-store sales below analysts' expectations. The data was a sign that skittishness about high unemployment and economic conditions were causing consumers to cut back.
The Dow Jones industrial average <.DJI> was down 30.84 points, or 0.29 percent, at 10,649.59. The Standard & Poor's 500 Index <.SPX> was down 3.99 points, or 0.35 percent, at 1,123.25. The Nasdaq Composite Index <.IXIC> was down 11.85 points, or 0.51 percent, at 2,291.72.
In the retail sector, shares of department store operator JC Penney Co Inc
There were some bright patches, however, as Target Corp
In general, the sales were disappointing and confirm that we're in a soft spot, Zaro said. But that sales rose at many stores shows that consumers are starting to spend again.
On the earnings front, health insurer Cigna Corp
Cigna rose 4.4 percent to $33.57 while hhgregg jumped 9.4 percent to $23.30.
On the downside, media company Viacom Inc
Ford Motor Co
(Editing by Jan Paschal)