Stocks fell on Thursday after an unexpected rise in jobless claims and concerns about higher inflation overseas pushed investors toward defensive stocks.
Weakness in Goldman Sachs
Defensives are coming into play as people worry about inflation and the choppiness in the jobs market, said Sandy Lincoln, who helps manage $38 billion as chief investment strategist at the Milwaukee-based M&I Investment Management.
It's a bit premature to think we're at a tipping point for a contraction, but something like inflation has the potential to become a much bigger issue as the year progresses.
March Chinese inflation accelerated to a rate as fast as 5.4 percent from a year earlier, Hong Kong media said. Such a rate would reinforce Beijing's vow to rein in price rises.
U.S. initial jobless claims unexpectedly rose in the latest week, climbing back above 400,000.
Goldman Sachs dropped 2.4 percent to $156.27 and was the biggest drag on the S&P financial sector <.GSPF>, which was the index's worst-performing group, down 0.8 percent.
Late Wednesday, a report from a Senate subcommittee said Goldman had sold mortgage-linked derivatives to clients at inflated prices and misrepresented the nature of the deals.
The S&P consumer staple sector <.GSPS> rose 0.3 percent, led by Supervalu Inc
The Dow Jones industrial average <.DJI> was down 33.60 points, or 0.27 percent, at 12,237.39. The Standard & Poor's 500 Index <.SPX> was down 3.85 points, or 0.29 percent, at 1,310.56. The Nasdaq Composite Index <.IXIC> was down 11.53 points, or 0.42 percent, at 2,749.99.
While the stock was flat, options activity suggested investors were bracing for a decline in the stock after earnings report.
There has been notably more put buying over the past two weeks leading up to earnings for Google, said Ryan Detrick, senior technical analyst at Schaeffer's Investment Research in Cincinnati, Ohio.
Ford Motor Co
In earnings news, Hasbro Inc
(Additional reporting by Angela Moon; Editing by Kenneth Barry)