U.S. stocks fell slightly on European debt worries on Thursday, but technology and financial shares rose on data pointing to a strengthening U.S. economy.
Financial shares were the day's top gainers in volatile trading on Wall Street. At the same time, Europe's bank stocks fell on worries over their ability to raise capital amid a sovereign debt crisis.
Data signaled improvement in the U.S. labor market. More than twice the expected number of private sector jobs were added in December while initial jobless claims dropped 15,000 in the latest week. In addition, the pace of U.S. services growth quickened more than expected in December.
The idea from the data is that our economy is picking up, so for banks, they'll start to see some loan growth, which will feed into their profits, said James Dunigan, chief investment officer at PNC Wealth Management in Philadelphia.
That's different than concerns about capital and stability in Europe, which the region is still dealing with, added Dunigan, who helps oversee $105 billion.
European banks <.SX7P> fell 3.2 pct while the KBW Banks index <.BKX> rose 1.2 percent. Bank of America Corp
Despite solid demand for a French government debt sale, investors fretted about more fragile economies, such as Italy and Spain. The euro, which has been closely correlated to global equities, fell to a 15-month low against the dollar on Thursday.
The Dow Jones industrial average <.DJI> was down 42.23 points, or 0.34 percent, at 12,376.19. The Standard & Poor's 500 Index <.SPX> was down 1.48 points, or 0.12 percent, at 1,275.82. The Nasdaq Composite Index <.IXIC> was up 7.20 points, or 0.27 percent, at 2,655.56.
The Nasdaq was boosted by strength in tech shares. Marvell Technology Group
The S&P retail index <.RLX> fell 0.6 percent as December sales rose, though discounts cut into profits over the holiday shopping season. Target Corp
But bookstore owner Barnes & Noble Inc
(Reporting By Ryan Vlastelica; Editing by Kenneth Barry)