U.S. stocks fell in choppy trading on Thursday after concerns about the euro zone's debt crisis overshadowed data suggesting a solid U.S. economic recovery.
Concerns about the ability of European banks to raise capital kept investors jittery. Despite solid demand for a French government debt sale, investors fretted about more fragile economies, such as Italy and Spain.
The euro, which has been closely correlated to global equities, fell to a 15-month low against the dollar on Thursday.
Market participants who had expected the stock market to decouple its performance from the euro zone's woes were disappointed as Wall Street fell despite signs of strength in the U.S. labor market.
Certainly we're getting some more encouraging news on the jobs market, but we have to be very aware that it does reflect a very volatile period of the year-- the holiday season and the days following the new year, said Bernard Baumohl, managing director at the Economic Outlook Group in Princeton, New Jersey.
The situation in Europe continues to deteriorate.... Our banks may take a hit, resulting in tighter lending conditions, Baumohl said.
The U.S. private sector added 325,000 jobs in December, well above expectations for 178,000, according to a private report, while weekly jobless claims fell by 15,000 last week.
The pace of growth in the services sector, the biggest part of the economy, picked up slightly in December, according to an industry report.
The Dow Jones industrial average <.DJI> was down 114.85 points, or 0.92 percent, at 12,303.57. The Standard & Poor's 500 Index <.SPX> was down 10.02 points, or 0.78 percent, at 1,267.28. The Nasdaq Composite Index <.IXIC> was down 12.07 points, or 0.46 percent, at 2,636.29.
Growth-related sectors like energy and industrials were the day's top decliners. The S&P industrials index <.GSPI> lost 1 percent and the energy sector <.GSPE> fell 1.3 percent.
On the upside, Dendreon Corp
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(Reporting By Angela Moon; editing by Kenneth Barry)