U.S. stocks opened slightly lower on Thursday as investors weighed hints of an improving economy against increasing disorder in Egypt and signs pointing to an end to the recent rally.
Initial claims for state unemployment benefits tumbled 42,000 to a seasonally adjusted 415,000, the Labor Department said. The lower-than-forecast claims number added to evidence that Friday's key U.S. non-farm payrolls report would show a jump in employment in January.
But better-than-expected readings of economic growth might not be enough to dislodge investor worries about rising unrest in Egypt, where gunmen fired on anti-government protesters in Cairo. The fighting killed six and wounded more than 800 people, prompting new calls from Western powers for President Hosni Mubarak to start handing over power immediately.
Egypt is slowing coming back to the front burner. People thought it could be resolved peacefully and quickly, but that doesn't seem to be the case. That's troubling from an equity perspective, since the country is important, especially for oil prices, said Nicholas Colas, chief market strategist at The Convergex Group in New York.
Brent crude rose above $103 a barrel on Thursday after the violent clashes in Egypt raised concern of supply disruptions and unrest across the Middle East.
The Dow Jones industrial average <.DJI> was down 13.09 points, or 0.11 percent, at 12,028.88. The Standard & Poor's 500 Index <.SPX> was down 1.42 points, or 0.11 percent, at 1,302.61. The Nasdaq Composite Index <.IXIC> was down 0.75 points, or 0.03 percent, at 2,748.81.
Merck & Co
(Additional reporting by Ryan Vlastelica; Editing by Padraic Cassidy)