Stocks Battered on Down Day

NEW YORK ( TheStreet) -- Major U.S. equity indices closed lower Thursday after European Central Bank President Mario Draghi warned of risks to the eurozone economy. In addition, U.S. economic data came in weaker than expected.

The Dow Jones Industrial Average was off 42 points, or 0.3%, to 13,944.

Breadth was deeply negative as decliners outpaced gainers 24 to six. The biggest decliners were Hewlett-Packard ( HPQ), Caterpillar ( CAT), Pfizer ( PFE) and Exxon Mobil ( XOM).

Top advancers on the Dow were Coca-Cola ( KO), American Express ( AXP), Boeing ( BA) and United Technologies ( UTX).

Boeing said it would propose battery design changes to minimize fire hazards for its grounded 787 Dreamliner, according to a Wall Street Journal article. The company said it hopes its embattled plane would begin to fly as soon as March. Boeing shares were up 1.5%.

Volumes totaled 3.56 billion on the Big Board and 1.95 billion on the Nasdaq. Losers led winners by a 1.3-to-1 ratio on the New York Stock Exchange and a 1.6-to-1 ratio on the tech-heavy index.

The S&P 500 lost 3 points, or 0.2%, to 1,509. The Nasdaq was shed 3 points, or 0.1%, to 3,165.

" I clearly think we're in a bull market, and part of being in a bull market is we're going to have consolidation and pullbacks," said Mike Boyle, portfolio manager at Advisors Asset Management. "We've been on a phenomenal run since about 10 days after the 2012 election ... and our study of markets says that about every 90 days during a bull market you need to have, you should have, history says you do have a 3% to 5% pullback."

The Labor Department reported nonfarm business productivity dipped 2% in the fourth quarter. The number was higher than the 1.3% decrease a consensus among economists had expected. The report comes a week after a surprise 0.1% contraction in gross domestic product last Wednesday.

The Labor Department said initial jobless claims for the week of Jan. 26 came in at 366,000, down 5,000 from the prior week's claims. The four-week moving average was 350,000, down 2,250 from the previous tally. Economists expected claims to print at about 360,000.

Investors have continued to monitor initial jobless claims and other labor market indicators as the Federal Reserve has closely pegged its policy of low interest rates to a target 6.5% unemployment rate. Anything that hits that threshold, the central bank has said, would trigger the Fed to begin raising interest rates. It has also said it would make such a move if inflation rose to at least 2.5%.

Chicago Fed Reserve President Charles Evans spoke Thursday morning in an interview with CNBC and said that quantitative easing may need to continue for the whole year. Evans said he was optimistic that economic momentum would pick up in 2013. Evans has been one of the biggest policy-making supporters for the Fed's unemployment rate target. His comments could also send waves through markets as traders continue to determine whether the Fed will stick with its highly accommodative monetary policy for the long term.

Same-store sales jumped 5%, according to Thomson Reuters. A consensus among analysts were expecting a 3.1% rise. Among the biggest winners were Macy's ( M), Kohl's ( KSS) and Nordstrom ( JWN).

The FTSE 100 in London dropped 1.1% on Thursday, while the DAX in Germany closed up 0.1%.

The Nikkei in Japan dropped 0.9% overnight, a day after the index posted its biggest intraday gain in two years. The Hang Seng in Hong Kong slipped 0.3%.

The ECB's Draghi kept interest rates unchanged at near-zero historic lows. Investors initially appeared calmed by Draghi's words as Spain and Italy worries re-emerge. Former Italian Prime Minister Silvio Berlusconi is looking to reclaim his post as the country's leader, which could frighten markets that are concerned what his re-emergence would mean for Italy's relationship with the ECB.

Spain also found itself in a precarious position as the opposition Socialist Party earlier this week called on its prime minister to step down on corruption allegations.

Gold for April delivery settled off $7.50 at $1,671.30 an ounce at the Comex division of the New York Mercantile Exchange, while futures for March crude oil contracts slipped 79 cents to close at $95.83 a barrel.

The benchmark 10-year Treasury was effectively flat with the yield at 1.964%. The dollar popped 0.58%, according to the U.S. dollar index.

In corporate news, Visa ( V) reported first-quarter net income of $1.3 billion on revenue of $2.85 billion. The credit card company said all of its transactions totaled $14.2 billion, which was a 4% increase from last year. Shares slid 2.3%.

Credit Suisse ( CS) reported a profit of 397 million Swiss francs ($435 million) in the fourth quarter of 2012, which was up from a year-earlier loss of 637 million francs. Shares fell 4%.

Yelp ( YELP) posted a fourth-quarter loss of 8 cents a share on revenue of $41.2 million, but missed analysts expectations of a loss of 5 cents a share on $40.29 million in revenue. Shares slumped 4.6%

Electronics giant Sony ( SNE) filed a loss for the October-December quarter of 10.7 billion yen ($115 million), which narrowed from the year-prior's loss of 158 billion yen. Depository receipts shed 4.4%

Alcatel-Lucent ( ALU) announced CEO Ben Verwaayen would be departing from his head position as of the French-U.S. telecommunications gear maker. Shares plunged 7%.

Media giant News Corp. ( NWSA) reported earnings for its fiscal second quarter of 44 cents a share on revenue of $9.43 billion. Wall Street expected a profit of 42 cents a share on revenue of $9.28 billion. Shares decreased 2.3%

Sprint ( S) shares fell 0.52% on Thursday after the company reported a loss of 44 cents a share on revenue of $9.01 billion. Analysts were expecting 46 cents a share on $8.92 billion in revenue.

LinkedIn ( LNKD) shares decreased 1.3% on Thursday before it reported earnings after the closing bell. The business-focused social networking company reported adjusted earnings of 35 cents a share on revenue of $303.6 million. Consensus among analysts polled by Thomson Reuters expected 19 cents a share on $280 million of revenue.

-- Written by Joe Deaux in New York.

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