U.S. stocks dropped early Thursday after worries about Russian aggression toward Ukraine ramped up again, with the S&P 500 pulling back from 2,000 and on pace to snap a three-day winning streak.

Kiev said Russian forces had entered Ukraine and seized the coastal town of Novoazovsk. A stronger-than-anticipated reading on U.S. economic growth wasn't enough to push equities higher.

The S&P 500 (SPX) fell 8 points, or 0.4%, to 1,992, while the Dow Jones Industrial Average(DJI) shed 68 points, or 0.4%, to 17,054. The Nasdaq Composite(RIXF) lost 18 points, or 0.4%, to 4,552.

The losses come after the S&P 500 and Dow both closed higher for a third straight day on Wednesday, with the S&P clinging to 2,000 and marking its 31st record close this year.

Today's market-moving data: The second estimate for second-quarter U.S. gross domestic product indicated expansion of 4.2%. Economists polled by MarketWatch had predicted 3.9% growth in GDP, down from an initial read of 4%.

Weekly jobless claims came in at 298,000, a slightly more encouraging result than what was expected by economists surveyed by MarketWatch, who forecast 300,000.

At 10 a.m. Eastern, an index that measures how many U.S. homes are ready to be sold is expected to show a rebound in July, after declining in June.

Movers and shakers: Abercrombie & Fitch Co. (ANF) and Williams-Sonoma Inc. (WSM) dropped after their quarterly earnings reports.

Signet Jewelers Ltd. (SIG) rose in the wake of its quarterly results. (Read more about Thursday's jumpiest stocks in the Movers & Shakers column http://www.marketwatch.com/story/workday-williams-sonoma-guess-are-stocks-to-watch-thursday-2014-08-28.)

Other markets: European stocks posted sharp losses as the first country-specific reports on August consumer prices fueled fears that the euro zone is heading toward deflation. Renewed tensions in Ukraine further added to the nervousness. Asian markets closed mostly in the red.

Oil prices gained, while gold also moved higher. The dollar advanced against most of its rivals.