Investors made few big moves in the stock market Thursday as they waited for the government's July employment report.
Stocks fell after retailers' sluggish July sales offset a Labor Department report that suggested layoffs are stabilizing. The government said new claims for unemployment benefits totaled 550,000 last week, down from a revised 588,000 the previous week. Economists had been looking for 580,000 new claims.
The department did have some sobering news: The number of people continuing to claim benefits rose by 69,000 to 6.3 million after dropping for three straight weeks.
Meanwhile, many of the nation's big retailers had disappointing sales as consumers, worried about their job security, again spent gingerly during July. That has Wall Street concerned that consumers don't feel confident enough to help give the economy a strong recovery.
The news sent the Dow Jones industrial average down 24.71, or 0.3%, to 9,256.26. The Standard & Poor's 500 index lost 5.64, or 0.6%, to 997.08, while the Nasdaq composite index fell 19.89, or 1%, to 1,973.16.
"The consumer isn't dead, but he's injured," said Stephen Wood, chief market strategist at Russell Investments.
The day's reports, coming just before the Labor Department's employment numbers, gave investors no incentive to resume the big summer rally that stalled earlier this week. Investors are worried about what the government has to say about the labor market on Friday. If it reports larger-than-expected job losses and a jump in the unemployment rate that's also higher than anticipated, investors are likely to sell out of fear that consumers will retrench further.
Trading has been muted the past two days. While there is genuine uneasiness in the market, analysts say some pause is to be expected after a huge advance; the Dow is up 13.9% in just 18 days.
About three stocks fell for every two that rose on the New York Stock Exchange where volume came to 1.1 billion shares.
Despite the growing caution in the market, analysts have been encouraged by the orderliness of the pullback, noting that stocks have shown strength in their ability to hold on to most of their gains rather than selling off sharply.
"We're not seeing panic selling," said Bill Groeneveld, president and head trader for Finance Investments. "We always like to see some reassessment of where we're at."
A modest decline in stocks on Wednesday followed minimal gains on Tuesday. Those moves came after a surge on Monday that hurled the S&P 500 index above the 1,000 mark for the first time since November.
The market soared last month on signs of improvement in industries such as housing and manufacturing, but worries over rising unemployment and still-sagging consumer spending have halted the market's rally.
"You're beginning to get a mixed bag of data," said Russell Investments' Wood. "I think that creates probably more lumpy returns in the market. It's not as clear-cut as when we were in a nosedive, but it's also far from clear that there is going to be a brisk recovery in the near future."
American ExpressAXP helped pull up shares of some financial companies Thursday after the credit card issuer said late Wednesday that the rate of losses on credit card loans is slowing.
Industrial stocks were slightly higher, while energy shares tumbled as the price of oil fell.
Shares of retailers were mixed following the lackluster sales reports. Wet Seal WTSLA slipped 7 cents, or 2.1%, to $3.30 after the teen retailer said sales at stores open at least a year dropped 12.1% in July, much worse than the 10% decline analysts expected.
Limited Brands LTD, however, reported a smaller than anticipated 7% drop in sales. It shot up more than 13%, adding $1.67 to $14.41.
In other trading, the Russell 2000 index of smaller companies fell 8.10, or 1.4%, to 557.89.
Bond prices edged higher, pushing yields down. The yield on the benchmark 10-year Treasury note fell to 3.73% from 3.75% late Wednesday.
The dollar was mixed against other major currencies, while gold prices fell.
Light, sweet crude fell 3 cents to $71.94 a barrel on the New York Mercantile Exchange.
In Europe, stocks rebounded after two days of losses, buoyed by solid corporate earnings reports. Investors also shrugged off the decision by European central banks to leave their benchmark interest rates at low levels. The Bank of England also announced plans to expand its asset purchase program, signaling that the government is still cautious about the economy despite recent signs of improvement.
Britain's FTSE 100 finished trading up 0.9%, Germany's DAX index rose 0.3%, and France's CAC-40 added 0.6%. Japan's Nikkei stock average rose 1.3%.