Fear Not: S&P 500 Remains Only 1% Lower Than Record High

NEW YORK (TheStreet) -- Put on those rose-colored glasses. The record gains achieved over the last few weeks seem the good times of yesteryear as Wall Street witnessed its second consecutive day in the red Thursday. With little incentive to buy markets dipped following the release of so-so consumer and labor data and flaring geopolitical risks.

After modest losses sustained earlier in the day, all three major indices plunged over the afternoon session. In the last hour of trading, the Dow Jones Industrial Average tumbled 0.65% to 16,734.19, and the Nasdaq shed 0.79% to 4,297.63.

The S&P 500 fell 0.71% to 1,930.1, following its biggest daily decline in three weeks a day earlier. While those losses may seem steep, the index is only 1.1% lower than its record-breaking close of 1,951.27 achieved on Monday; there's still some gas left in the tank yet.

Raymond James' Jeffrey Saut is taking the movements with a grain of salt. In a note Thursday, he wrote, "We think the economy strengthens from here. That said, the S&P 500 has traveled into the 1950-1975 target zone suggesting another pause/pullback attempt, albeit within the construct of a secular bull market."

To the data contributing to market jitters, U.S. retail sales increased by a less-than-expected 0.3% in May. However, April's large upward revision to 0.5% should help maintain expectations of an acceleration in the contribution from the consumer to second-quarter GDP growth.

Jobless claims rose slightly by 4,000 to 317,000 in the week ended June 7. The data aren't expected to hurt the outlook on the job market recovery. Import prices ticked up just 0.1% in May, keeping inflation concerns in check.

Risk appetite Thursday could be impacted by escalating geopolitical uncertainty sparked by developments in Iraq, where al-Qaeda affiliates are reportedly taking over key northern cities and are on their way to Baghdad.

One of the worst-performing stocks of the day, Lululemon Athletica (LULU), plunged 15.9% on weak second-quarter and full-year guidance.

In news of corporate intrigue, Twitter's (TWTR) chief operating officer Ali Rowghani has resigned and the social network informed investors his role will not be replaced. No love lost there, though, as Twitter shares popped 3.5% to $36.79. The stock is still down 40% year to date as disappointing user engagement figures have weighed on investor sentiment.

Selloffs didn't spare some of the biggest names in tech: Apple (AAPL) lost 1.7%, Microsoft (MSFT) was down 0.69%, Facebook (FB) slipped 2.4% and Amazon (AMZN) shed 2.8%.

-- By Keris Alison Lahiff and Andrea Tse in New York

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