U.S. stocks sagged on Thursday and the Dow closed below 10,000 a day ahead of an expected downward revision in U.S. second-quarter economic growth and a major speech by Federal Reserve Chairman Ben Bernanke.
Major technology shares were among the biggest losers, with the Nasdaq falling more than the Dow and S&P 500. Tech shares have been seen as a proxy for economic growth. Cisco Systems
Stocks initially rose on data showing first-time claims for jobless benefits fell more than expected last week, but the number was still too high to signal a shift in the weak labor market. The four-week average of new claims, regarded as a better gauge of trends, rose to the highest since late November.
The best the bull can say is that the recovery is evening itself out now, it's not accelerating any more, said Linda Duessel, market strategist at Federated Investors in Pittsburgh.
We think it's a soft patch and not a double dip, but the market is pricing more and more for a double dip, so you're vulnerable to the upside.
The Dow Jones industrial average <.DJI> fell 74.25 points, or 0.74 percent, to 9,985.81. The Standard & Poor's 500 Index <.SPX> shed 8.11 points, or 0.77 percent, to 1,047.22. The Nasdaq Composite Index <.IXIC> lost 22.85 points, or 1.07 percent, to 2,118.69.
It was the first time the Dow has closed below the psychologically important 10,000 level since July 6. The market then began a rebound and logged seven straight days of gains.
In his speech on Friday Bernanke is likely to discuss the uncertain prospects for the economy but isn't expected to give many clues about whether the U.S. central bank will pump more cash into the economy to keep the recovery going.
Bernanke and central bankers from around the world are gathering for their annual meeting in Jackson Hole, Wyoming, with the agenda expected to include a discussion of printing yet more money to spur growth.
After a recent spate of poor economic numbers, there were jitters the GDP data could show the economy is weaker than originally thought. The government's preliminary reading is expected to come in at 1.4 percent, down from 2.4 percent estimated a month ago. Estimates range broadly from 0.9 percent to 2.2 percent, according to a Reuters poll.
On the technical picture, investors were still looking for the 1,040 level on the S&P to act as support. Some consider a dip below that level to be a buying opportunity, as was seen on Wednesday when the index briefly fell below it.
In deal news, Dell Inc
HP came back with a revised proposal after the closing bell, sending 3PAR's shares up 7.2 percent to $27.90 in extended-hours trading. Shares of 3PAR closed at $26.76. HP closed down 0.1 percent at $38.22, while Dell ended down 0.3 percent to $11.75
A drop in shares of coal companies weighed on the energy sector for a second day as the price of natural gas fell, raising concerns that power plants would switch to gas from coal. Massey Energy
(Reporting by Leah Schnurr; Editing by Kenneth Barry)