As the largest buyer of raw materials, a slowdown in China can hurt sales at a wide range of companies and cause commodities prices to weaken. Crude oil fell 44 cents to $87.22 per barrel, and copper lost 4.7 cents to $3.493 a pound.
Central banks in Europe also moved to stem a slowdown there. The Bank of England approved a 50 billion pound injection into the ailing British economy, while the European Central Bank cut its main interest rate by a quarter of a percentage point to 0.75 percent, the lowest it's been since the bank was established in 1999.
Usually central bank action to spur economies bolsters stock prices. But investors were cautious ahead of the closely-watched U.S. government's report on hiring for June that is scheduled for release on Friday.
"Given the big negative headlines we have had this past month from Europe, business owners would have been cautious about hiring," said Steven Goldman, principal of asset manager Goldman Management. Goldman expects the data to reflect a weak jobs market.
Economists are predicting that the unemployment rate held steady at 8.2 percent.
However, at least two reports on Thursday sketched a picture of a slowly improving job market.
Weekly unemployment benefit applications dropped by 14,000 to 374,000, the Labor Department said Thursday. That's the fewest since the week of May 19.
Separately, payroll provider ADP said businesses added 176,000 jobs last month. That's better than the revised total of 136,000 jobs it reported for May. If that pace keeps up, it would be enough to lower the unemployment rate.
An increase in jobs will spur people to spend and provide a boost to the economy. Though some key retailers reported poor sales for June, several others beat analysts' expectations.
Ross Stores stock rose $4.41, or over 7 percent, to $67.19 after the discount store operator said sales at stores open at least a year rose 7 percent in June, easily beating Wall Street predictions. TJX Cos., which operates T.J. Maxx, Marshalls and Home Goods stores, also reported a wider-than-expected 7 percent increase in sales last month. Its stock rose $1.59, or 3.7 percent, to $44.09.