The U.S. stock market ended Thursday's session with modest losses, as investors moved out of riskier assets and into gold and U.S. Treasurys.
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The drop in stocks, while relatively modest, was global, with Asian and European markets also losing ground.
Key benchmarks hit the day's lows late in the session. The S&P 500 (SPX) fell 10.67 points, or 0.6%, to 1,909.57. The Dow Jones Industrial Average (DJI) dropped 75.07 points, or 0.5%, to 16,368.27.
The Nasdaq Composite (RIXF) fell 20.08 points, or 0.5%, at 4,334.97.
Read the recap of MarketWatch's live blog of today's stock-market action.
In economic news, the number of people who applied for unemployment benefits fell below 300,000 for the second time in three weeks, solidifying a picture of an improving U.S. labor market. Better-than-expected data briefly pushed stocks higher, but gains soon dissipated.
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Instead, investors pushed up prices of Treasurys and gold. The yield on a 10-year Treasury note, which falls when prices rise, fell to the lowest level in more than a year, at 2.42%, while gold settled above $1,300 for the second session in a row.
The S&P 500 is now down 4% from its peak, hit by fears that the stronger economy could push the Federal Reserve to raise interest rates sooner than expected as well as escalating tensions surrounding Ukraine. On Thursday, Russia banned food imports from the U.S., members of the European Union and other countries in retaliation over sanctions.
"This market got complacent and ahead of itself a few weeks ago, was overbought on technical levels. So the selloff last week was not surprising," said Paul Zemsky, chief investment officer of multi-asset strategies at Voya Investment Management. "There is nothing in our indicators that signals a larger 10%-15% correction. However, we think the S&P 500 will fall to 1,900 before continuing to march higher."
Netflix Inc. (NFLX) shares rallied 4.5% after Chief Executive Reed Hastings. in a Facebook post, said Netflix's subscriber revenue totaled $1.146 billion last quarter, edging out HBO's $1.141 billion.
21st Century Fox (NWSA) climbed 4.6% following better-than-expected earnings results.
Shares of iDreamSky Technology Ltd. (DSKY) jumped 6.3% on its first day of trading on the Nasdaq. The company describes itself as the biggest independent mobile-game publishing platform in China. Read more about what to know about the iDreamSky IPO.
Read more about the day's big stock moves here.
European stocks fell amid concerns about the impact of Russian sanctions on its economy. Coca-Cola HBC AG slid 5.3% on a warning tied in part to Russia. The Stoxx Europe 600 index fell 0.7% to 326.96. Meanwhile, European Central President Mario Draghi said at his monthly press conference that monetary policies in the U.S. and the euro zone are on a "diverging path" and will remain that way for a long time.
Also read: Draghi unperturbable, but clock ticks toward QE
In Asia, the Shanghai Composite Index tumbled 1.3% and Hong Kong's Hang Seng Index fell to its lowest settlement in nearly two weeks as casino shares dropped.
In other markets, gold prices (GCU4) inched up after a big jump on Wednesday, while oil (CLU4) gained and the dollar (DXY) inched higher.