Technology shares dragged U.S. stocks lower on Thursday as disappointing Cisco earnings overshadowed stronger-than-expected data on weekly unemployment benefits claims.
Also weighing on equities were higher yields for indebted European countries, which reflected concern over the lack of a concrete policy to tackle the euro zone's debt crisis. The U.S. dollar gained versus the euro and pulled commodity prices lower.
The S&P basic materials sector <.GSPM> fell 0.5 percent.
Cisco Systems Inc
New U.S. claims for unemployment benefits dropped to their lowest in 2-1/2 years, the government said, in a sign the labor market was improving.
Results were not overwhelming, so the market hasn't had that much of a reaction (to the better data), at least so far, said Tim Ghriskey, chief investment officer at Solaris Asset Management in Bedford Hills, New York.
We could be seeing a little bit of profit taking.
The Dow Jones industrial average <.DJI> dropped 48.59 points, or 0.40 percent, to 12,191.30. The Standard & Poor's 500 <.SPX> fell 5.55 points, or 0.42 percent, to 1,315.33. The Nasdaq Composite <.IXIC> lost 23.41 points, or 0.84 percent, to 2,765.66.
The chart for the S&P 500 index shows near-term technical support at the 1,313 level, getting stronger near 1,300.
Some traders pointed to weakness in stocks as a buying opportunity.
(Reporting by Rodrigo Campos, additional reporting by Chuck Mikolajczak; Editing by Kenneth Barry)