The Dow Jones industrial average lost 87.49 points, or 0.82%, to 10,610.10. The broader Standard & Poor's 500 index lost 9.18 points, or 0.74%, to 1,235.86. The tech-heavy Nasdaq composite lost 25.49 points, or 1.15%, to 2,191.32.
Looking ahead to Friday, the closely watched jobs report on July employment will be released before the market opens. Economists polled by Action Economics are expecting 180,000 new jobs to have been added in July, up from 146,000 in June.
In the energy markets, crude oil pulled back from session highs to settle up 52 cents at $61.38 per barrel on the New York Mercantile Exchange. Some of the earlier rise in energy prices was sparked by reports of problems with two refineries, along with speculators betting that hot weather in the Northeast U.S. and elsewhere will boost demand for the diesel fuel that utilities use, according to Standard and Poor's Marketscope.
Initial claims for jobless benefits fell to 312,000 from 313,000 (revised from 310,000) in the week ended July 30, which was lower than the consensus forecast expecting a rise to 315,000. The more closely watched jobs report on July employment will be released tomorrow. Economists polled by Action Economics are expecting 180,000 new jobs to have been added in July, up from 146,000 in June.
In corporate news, U.S. retailers reported mixed July sales early Thursday morning. Outperformers included clothing chain Talbots (TLB
) which posted an 11.3% increase in same-store sales and teen-oriented retailer American Eagle Outfitters (AEOS
), which reported a 17.1% rise in same-store sales. Discounter Costco (COST
), with a 5% gain in same-store sales, also beat expectations, while Wal-Mart's (WMT
) 4.4% rise was in line with expectations.
Yet those missing Wall Street forecasts included J.C. Penney (JCP
), and Pier 1 Imports (PIR
), Abercrombie and Fitch (ANF
), Ann Taylor (ANN
), and Limited ((LTD
Exxon Mobil (XOM
) announced that its chairman and CEO Lee R. Raymond will retire at the end of the year. The board expects to name company president Rex W. Tillerson to fill both posts.
In earnings news, razor maker Gillette (G
), which is in the process of being acquired by consumer products giant Procter & Gamble (PG), said Thursday that its second-quarter earnings increased by 17% to $498 million, beating forecasts.
Cosmetics group Revlon (REV
) reported a second-quarter loss of $35.8 million, down from $38.9 million in the period a year ago, though still slightly greater than expected.
Food company Sara Lee (SLE
) also reported a fourth-quarter loss of $148 million, down from earnings of $354 million a year ago, thanks to restructuring charges, higher commodity costs and weak European sales.
Treasury prices fell Thursday, with the yield on the benchmark 10-year note up slightly at 4.31%.
European stock markets closed lower Thursday. London's FTSE 100 index fell 16.80 points, or 0.32%, to 5,315.50 on worries about the economy. Fund manager Amvescap was lower after Canada's CI Fund Management dropped a plan to pursue a hostile takeover offer, while Imperial Chemical rose to a three-year high on its report of strong second-quarter income.
Germany's DAX index fell 49.06 points, or 1.00%, to 4,874.06, despite that Germany factory orders unexpectedly rose 2.4% in June. Automakers DaimlerChrysler and BMW were both lower.
In Paris, the CAC 40 index lost 36.51 points, or 0.81%, to 4,458.97 on profit-taking, some disappointing earnings and concern that higher oil prices will slow the economy. Societe Generale was lower even though the bank reported that its second-quarter profit grew 18%.
Asian markets finished mixed Wednesday. In Japan, the Nikkei index fell 98.49 points, or 0.82%, to 11,883.31. Stocks were hurt by political uncertainty as the House of Councillors delayed a vote on Prime Minister Junichiro Koizumi's plan to privatize Japan Post, which is the world's largest savings institution.
In Hong Kong, the Hang Seng index fell 6.96 points, or 0.05%, to 15,111.54.