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NEW YORK: US stock markets ebbed on Thursday, reversing early gains garnered from news of an unexpected fall in jobless claims and solid company earnings as fears of a faltering recovery resurfaced.
The Dow fell 30.72 points (0.29 percent) to 10,467.16 at the closing bell.
The tech-rich Nasdaq composite index fell 12.87 points (0.57 percent) to 2,251.69 while the broader S&P 500 index lost 4.60 points (0.42 percent) at 1,101.53.
New claims for US unemployment benefits fell unexpectedly last week to 457,000, down 2.4 percent from the previous week, the Labour Department said.
Jobless claims fell by 11,000 in the week ending July 24, down substantially from the 464,000 level expected by analysts.
The market had also been bolstered by better-than-expected earnings from energy titan ExxonMobil.
Before the opening bell, the firm reported that profits nearly doubled in the second quarter of the year, as production from fields in Qatar and Kazakhstan rose.
Net earnings rose to 7.56 billion dollars, versus 3.95 billion in the same period a year before.
Shares in the firm were up around 1.5 percent in opening trades, before falling back to almost one percent in the red.
But the broader market slipped as ratings for drug store chain CVS were slashed.
"The stock was hit with a downgrade and had its target price reduced by a couple of different firms this morning," said analysts at Briefing.com.
CVS shares were down just over two percent.
Kraft foods' stock was off 2.05 percent and Procter & Gamble was down 1.64 percent as the consumer staples sector took a hammering.
The fall was compounded by comments from a top Fed official who warned the US economy risked "Japanese-style" stagnation, ahead of a key economic report on Friday that is expected to show the recovery is losing pace.
Bluntly cautioning about "the peril" of deflation, James Bullard - a member of the Fed's interest rate-setting panel - said the United States was closer to a Japanese-style lost decade "than at any time in recent history."
On Friday, the US government will publish its growth estimates for the second quarter. Analysts expect gross domestic product to have slowed to 2.5 percent in the period, down from 2.7 percent in the first three months of the year.
Bonds were mixed. The yield on the 10-year US Treasury bond fell to 2.979 percent from 3.001 percent on Wednesday while that on the 30-year bond rose to 4.078 percent from 4.068 percent. Bond yield and prices move in opposite directions.
- AFP/de
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