Weaker than expected sales reports from retailers and another large number of claims for unemployment benefits pulled the stock market lower for the second straight day Thursday.
The Dow Jones industrial average lost 41.59, or 0.3%, to 12,248.55. The Standard & Poor’s 500 index dipped 1.61, or 0.1%, to 1,312.94. The Nasdaq composite rose 4.12, or 0.2%, to 2,773.31.
Slightly more stocks fell than rose on the New York Stock Exchange. Trading volume was 3.9 billion shares.
First-time applications for unemployment benefits, an indication of how many people are losing their jobs, fell slightly last week to 422,000. That was more than economists were expecting and well above the 375,000 level that signals that the economy is adding jobs.
“Companies are just not hiring the same number of workers that they laid off two years ago, and that’s leading to a very stale jobs environment,” said David Loesser, the president of the Estate Planners Group, a financial advisory firm in Washington Crossing, Pa.
Several retailers reported poor sales for May, adding to concerns that the U.S. economy is straining under higher costs for raw materials like oil and cotton. Companies that catered to middle and lower income shoppers said that higher food and gas prices cut into sales. Gap Inc. (GPS) fell after sales fell across all its brands. Target Corp. (TGT) fell after missing expectations as sales traffic slowed during the second half of the month.
Luxury retailer Saks Inc. (SKS) was among the few companies in the category that rose. The company gained after far surpassing analyst’s expectations.
Financial companies fell, though less than the overall stock market. Goldman Sachs (GS) dropped after the bank received a subpoena from the Manhattan District Attorney‘s office to discuss its role in the financial crisis. The subpoena follows the April release of a Senate report that showed Goldman had steered investors toward mortgage securities it knew would likely fail.
A number of recent reports have indicated that the U.S. economy may be slowing. On Wednesday, payroll processor ADP said that private employers added just 38,000 jobs in May, down from 177,000 in April. That, along with a sharply lower reading on a key manufacturing index sent the Dow industrials down 280 points Wednesday. It was the worst drop in nearly a year and erased more than a quarter of the stock market’s gains for 2011.
After racing to its best first quarter since 1998 thanks to higher corporate profits, the S&P 500 has fallen 3.8% over the last month. It is still up 4% for the year.
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