Stocks Finish Lower Ahead of Jobs Report

NEW YORK (TheStreet) -- A mixed batch of economic data sent stocks lower on Thursday as Wall Street showed some apprehension ahead of Friday's big April jobs report.

Weekly initial jobless claims came in better than expected this morning, sending futures higher, but the optimism quickly faded. The majority of the other early headlines were negative as a report on activity in the U.S. services sector was disappointing and same-store sales for last month came in relatively soft.

In addition, the European Central Bank left interest rates unchanged but commentary around the decision seemed to quash hopes for more near-term stimulus for the region.

The Dow Jones Industrial Average lost 62 points, or 0.5%, to close at 13,207. The S&P 500 gave back 11 points, or 0.8%, to settle at at 1391.57.

The Nasdaq suffered the most dramatic pullback, falling 36 points, or 1.2%, to finish at 3024.30. Apple ( AAPL) was a drag, losing 0.7%. Based on Thursday's close at $581.82, the stock is down nearly 10% since hitting an all-time high of $644 on April 10.

The epic plunge in Green Mountain Coffee Roasters ( GMCR) was also a factor for the Nasdaq as the stock, a component of the Nasdaq 100, dropped nearly 50% on volume of more than 87 million after a disappointing quarterly report and outlook.

Breadth within the Dow was negative with 23 of the index's 30 components in decline. The biggest percentage losers were Alcoa ( AA), Bank of America ( BAC), Caterpillar ( CAT), Chevron ( CVX), Hewlett-Packard ( HPQ), and Intel ( INTC).

Gainers among the blue chips included Walt Disney ( DIS), Coca-Cola ( KO), and Procter & Gamble ( PG).

In the broad market, losers outpaced winners by a 2-to-1 ratio on the New York Stock Exchange and by a 3-to-1 ratio on the Nasdaq.

On Thursday, the Labor Department said that the advance figure for seasonally adjusted initial jobless claims for last week fell 27,000 to 365,000, from an upwardly-revised 392,000 the prior week. It was the largest weekly drop since early May 2011.

"This drop reinforces the view that the recent rise was more a function of seasonality than underlying deterioration in labor conditions," said Eric Green, chief economist at TD Securities, after the report.

"Jobless claims data delivered a welcome reversal of the recent trend higher but not without leaving us with a reminder of labor market softness in the shape of another upside revision to earlier data," added Andrew Wilkinson, chief economic strategist at Miller Tabak.

The four-week moving average increased 750 to 383,500. Economists surveyed by Thomson Reuters were expecting claims to tick down to 380,000 in the week ended April 28 from the previous estimate of 388,000 for the prior week.

Continuing claims fell 53,000 to a seasonally adjusted 3.28 million in the week ended April 21.

Thursday's data on jobs preceded the much-anticipated April nonfarm payrolls report from the Labor Department on Friday, which greatly disappointed last month. The economy added only 120,000 jobs in March, about half the gains posted in each of the previous three months. Economists currently expect a gain of 170,000 for April.

The Institute for Supply Management's non-manufacturing index measuring activity in service industries came in at 53.5 for April, the weakest read of the year. Economists were expecting 55.5 for April.

Meantime, the monthly retail sales reports were weak. The Thomson Reuters Same-Store Sales Index rose 0.8% in April, compared to a 9% rise a year ago when Easter occurred later in the month. Excluding drug stores, the index increased to 2.2%.

Shares of Target ( TGT), Walgreens ( WAG) and Gap ( GPS) all fell after the retailers all reported soft same-store sales for April, posting respective declines of 1.9%, 0.4% and 0.6%.

In Europe, London's FTSE settled up 0.1% and the DAX in Germany fell 0.2%.

Following its meeting in Barcelona, the European Central Bank left its benchmark main interest rate unchanged at 1%. European Central Bank President Mario Draghi said later in a press conference that the ECB's bond-buying program is still available but implied that he wouldn't be releasing any near-term stimulus measures, and that it was now up to the individual governments to take control of the European debt crisis and carry out much-needed reforms.

Ahead of the meeting, Spain raised €2.52 billion ($3.3 billion) in three- and five-year bonds, just above the top end of its targeted range of €1.5 billion to €2.5 billion. But borrowing costs at the auction rose given the deep concerns about the Spanish economy.

The Hang Seng Index in Hong Kong shed 0.3%. The Japanese market is closed Thursday and Friday for national holidays.

In corporate news, Dow component Kraft Foods ( KFT) dipped less than 1% ahead of its first-quarter results then reported an operating profit of 57 cents a share for the March-ended period on revenue of $13.09 billion after the closing bell. Analysts were calling for earnings of 56 cents a share on revenue of $13.05 billion.

Costco Wholesale ( COST), the warehouse retailer, said its same-store sales rose 4% in April. Total sales rose 7% to $7.25 billion. The stock closed down 2.2%.

Kensey Nash ( KNSY), a medical-devices company, agreed to be acquired by Dutch high-performance materials maker Royal DSM for $38.50 a share. The cash bid, which has been approved by the Kensey Nash board, is a 33% premium to Kensey Nash's closing price of $29.01 on Wednesday. Share of Kensey Nash soared more than 30%.

Buyout firm Carlyle ( CG) made its public debut on Thursday, pricing its IPO below expectations at $22 per share. The stock closed up a nickel.

In commodity markets, the June crude oil contract was off $2.67 to settle at $102.54 a barrel. June gold futures were down by $13.20 to close at $1,634.80 an ounce.

The benchmark 10-year Treasury slipped 2/32, lifting the yield to 1.936%. The dollar index was up 4 cents at 79.22.

-- Written by Andrea Tse in New York.

>To contact the writer of this article, click here: Andrea Tse.

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