U.S. stocks fell on Thursday but were off session lows after weak employment and durable goods data added to recent worries about the strength of the economic recovery.
Weighing further on Wall Street, rating agencies said they might downgrade Greece's sovereign debt rating, refocusing attention on some euro-zone countries' weak fiscal health, an issue that has weighed on Wall Street of late.
We've got kind of a relapse of the global macro jitters overshadowing the marketplace, said Craig Peckham, equity trading strategist at Jefferies & Company in New York. The jobless claims front was disappointing, as well as the durable goods orders.
Industrial and financial shares dragged the most on the S&P 500, with heavy equipment maker Caterpillar Inc
The government said durable goods orders, which gauge demand for a wide range of long-lasting U.S. manufactured goods, unexpectedly fell in January, while the number of workers filing claims for jobless benefits rose to 496,000 last week.
The Dow Jones industrial average <.DJI> lost 74.44 points, or 0.72 percent, to 10,299.72. The Standard & Poor's 500 Index <.SPX> dropped 5.77 points, or 0.52 percent, to 1,099.47. The Nasdaq Composite Index <.IXIC> fell 10.13 points, or 0.45 percent, to 2,225.77.
A sharp retracement in stocks coincided with rumors Apple Inc
Some traders said the move was a result of the oversold market earlier in the session.
The market might be beginning to believe that there was some overreaction, and now (they) are looking at it as a buying opportunity, said Jeff Kleintop, chief market strategist at LPL Financial in Boston.
Health insurance stocks were in focus as U.S. President Barack Obama opened a healthcare reform summit in Washington. The Morgan Stanley healthcare payor index <.HMO> fell 0.4 percent.
Moody's said a change in Greece's rating would depend on whether Athens could smoothly enact a fiscal reform plan, while Standard & Poor's said a downgrade by one or two notches in the next month was possible. The move could increase borrowing costs and exacerbate Greece's problems.
On his second day of congressional testimony, Federal Reserve Chairman Ben Bernanke said U.S. regulators are looking into how Wall Street firms like Goldman Sachs
Thursday's U.S. economic data came on top of disappointing data on consumer sentiment and home prices and sales earlier this week.
(Reporting by Rodrigo Campos; Additional reporting by Leah Schnurr; Editing by Jan Paschal)