NEW YORK ( TheStreet) -- U.S. stocks sold off ahead of the close to finish with marginal declines on Thursday, ending May on a fittingly disappointing note. After a sour morning in the red, the major U.S. equity indices all battled back into positive territory late in the session following reports that the International Monetary Fund was prepping a contingency plan to rescue Spain if the country's financial situation continues to deteriorate. But the gains proved unsustainable ahead of Friday's May jobs report. Thursday's raft of economic data did little to build confidence, showing evidence of a disappointing pace of job creation and slower economic growth than initially thought. The IMF also discounted the reports that it's planning a rescue loan for Spain; although stocks initially remained higher after that news. The Dow Jones Industrial Average finished down 26 points, or 0.21%, at 12,393. The blue-chip index ranged between 12,489 and 12,316 during the volatile session, coming within 100 points of going negative for the year at the day's low. The S&P 500 fell 3 points, or 0.2%, to close at 1310, while the Nasdaq lost 10 points, or 0.4%, to settle at 2827 after running as low as 2802 earlier in the session. The afternoon roller-coaster ride for stocks never dampened demand for U.S. bonds though with the yield on the 10-year Treasury remaining near new record lows. As for May, those investors that followed the old adage about selling out and going away are feeling pretty good right now. The Dow was down 6.2% for the month, while the S&P 500 fell 6.3% and the Nasdaq suffered a 7.2% decline. Year-to-date, the indices are still up 1.4%, 4.2% and 8.5% respectively. "The retail investor ... a lot of people really don't trust this market, maybe they say the market is rigged or it's insider's game, so you just see a lot of people taking their money out of U.S. equities and putting them into bonds and looking for capital preservation instead of the risk-on trade," said Joe Bell, senior equity analyst at Schaeffer's Investment Research. Bell's point is backed up by data released Thursday by the Investment Company Institute that found long-term mutual funds investing in U.S. equities saw outflows of $7.2 billion in the week ended May 23, bringing the total for the past five weeks to $19.5 billion. Bond funds have seen total inflows of $30.6 billion in the same span.
Within the Dow, 14 of the index's 30 components were higher, led by gains in AT&T ( T), Bank of America ( BAC) and Walt Disney ( DIS). The biggest percentage decliners among the blue chips were Caterpillar ( CAT), Exxon Mobil ( XOM), and Intel ( INTC). The weakest sectors were capital goods, basic materials and technology, while financials, transportation and utilities closed higher. Amid a lull in the negative headlines from Europe, Thursday's economic data set the tone for early trading, and little of it bodes well for Friday's jobs report. ADP's employment report showed companies created 133,000 jobs in May, short of expectations. Economists had expected the private sector to have added 148,000 jobs in May, according to Thomson Reuters. In April, companies created 119,000 jobs. Also global outplacement firm Challenger, Gray and Christmas said employers announced plans to lay off 61,887 workers in May, an eight-month high and up 67% from a year earlier. In addition, the Labor Department said initial jobless claims for the week ended May 26 jumped to 383,000, higher than the 370,000 economists were expecting. Meantime, the Bureau of Economic Analysis at the Department of Commerce said the economy expanded at a rate of 1.9% during the first quarter, down from the advance GDP estimate of 2.2%. That was in line with expectations. There was also disappointment after the Institute for Supply Management said the Chicago Purchasing Managers index came in at 52.7 for May; the consensus was looking for a reading of 57, up slightly from 56.2 in April. A reading over 50 indicates expansion. July oil futures settled down $1.29 at $86.53 a barrel. August gold futures were volatile once again, losing $1.50 to settle at $1564.20 an ounce after running as high as 1574.60 earlier in the day.
The benchmark 10-year Treasury rose 16/32, lowering the yield to 1.568%, and the greenback was up 0.06% against a basket of six major currencies represented by the dollar index. European markets finished mixed after an early bounce. The FTSE in U.K. edged higher by 0.2%, while the DAX in Germany slipped 0.3%. In corporate news, the nation's retailers, including Gap ( GPS) and Target ( TGT), reported their same-store sales numbers for May. Gap said comparable store sales rose 2% in May, less than the 3.1% jump analysts were predicting. Shares closed down 0.6%. Target reported a 4.4% growth in same-store sales in May, beating analyst estimates. The stock rose 0.2%. Costco ( COST) said same-store sales rose 4%, short of the 4.3% analysts were expecting. The stock gained 0.7%. Shares of another retailer, Talbots ( TLB), soared nearly 90% after the Hingham, Mass.-based women's apparel seller agreed to be acquired by Sycamore Partners in a deal worth $369 million, including debt. The transaction values Talbots at $2.75 per share in cash. TiVo ( TIVO) reported weak first-quarter results and second-quarter guidance. The digital video recording company forecast service and technology revenue of between $53 million and $55 million and a net loss of $28 million to $30 million for its fiscal second quarter. Analysts currently expect revenue of $56.5 million and a loss of $27 million. The stock closed down 5%. Ciena ( CIEN) shares tacked on more than 14%after the network equipment maker reported an adjusted profit of 4 cents per share, beating expectations of a loss of 3 cents a share. Written by Shanthi Bharatwaj in New York.