Stocks fell on Thursday due to profit-taking in financials, a drag from the health-care sector and a bearish broker comment on 3M Co.
Investors were also unsettled by the implications of the Federal Reserve's action to pump another $1 trillion into the financial system, and the possibility of this stirring up inflation in the long term.
Shares of diversified manufacturer 3M
Shares of large pharmaceuticals, including Pfizer
Among financials, shares of JPMorgan
Yesterday was a surprise day with the Fed actions. No one in general was expecting the Fed to be as aggressive. There is a knee-jerk reaction to move to gold and inflation beneficiaries, and those groups were pretty heavily shorted groups, so there's a lot of short covering in material stocks and commodity stocks as well.
The Dow Jones industrial average <.DJI> dropped 59.90 points, or 0.80 percent, to 7,426.68. The Standard & Poor's 500 Index <.SPX> fell 5.53 points, or 0.67 percent, to 789.00. The Nasdaq Composite Index <.IXIC> lost 5.84 points, or 0.39 percent, to 1,485.38.
In economic news, the number of U.S. workers drawing continuous state unemployment benefits hit a fresh record high early this month, according to government data that highlighted the difficulties of getting new jobs in the recession-hit economy.
But a weaker dollar following the Fed's action on Wednesday also helped boost commodity prices and lift shares in the energy and materials sectors, cushioning the market.
Shares of Chevron
Also on the upside, auto parts suppliers' shares soared following a pledge by the U.S. Treasury to provide the sector up to $5 billion in financing support to help them survive a massive downturn in car sales.
(Editing by Jan Paschal)