Central Bank Action, Upbeat Data Fail to Spur Optimism

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The broad S&P 500 fell mildly on Thursday in light action as traders shrugged off fresh easing from three major central banks and a round of surprisingly strong data on the U.S. economy

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Today's Markets

The Dow Jones Industrial Average fell 47.2 points, or 0.36%, to 12897, the S&P 500 slipped 6.4 points, or 0.47%, to 1368 and the Nasdaq Composite rose 0.04 point, or 0.00%, to 2976.

Market participants coming back to work following the Independence Day holiday in the U.S. were confronted with a slew of headlines on the day.

Central Banks Take Action

The European Central Bank cuts its main refinancing, deposit and marginal lending rates by 0.25-percentage point in a move aimed at dulling the impact of the eurozone debt crisis on the currency bloc’s economy and financial system. The People's Bank of China, which is China's central bank, also sliced its benchmark lending and deposit rates as it looks to avoid a hard landing for the world's No. 2 economy.

The Bank of England boosted the size of its quantitative easing program by 50 billion pounds to 375 billion as it looks to shield the U.K. economy from Europe’s debt crisis. The BoE also held its benchmark interest rate steady as expected.

Now all eyes will likely focus on the Federal Reserve, which has been confronted with a range of data suggesting the U.S. economy may be stalling as a result of headwinds from across the world. Interest rates are already locked at extraordinarily low levels, and the central bank is lengthening the maturity of its balance sheet, but it has come short of calling for a fresh round of quantitative easing.

Data Dump

Several reports will be released on the day that may shed additional light on the situation.

The U.S. private sector tacked on 176,000 jobs in June from May, according to a report from payroll processing firm ADP, topping estimates of an increase of 105,000. Small businesses led the gain, hiring 93,000 workers. Medium-sized businesses had the second-biggest gain of 72,000 and big companies weighed in at 11,000.

New claims for unemployment benefits fell to 374,000 last week from an upwardly revised 388,000 the week prior, the Labor Department reported. Claims were expected to fall to 385,000 from an initially reported 386,000. The number of planned job cuts by U.S. firms fell to 37,551 in June, which represents a 39% drop from May, according to a report by Challenger, Gray & Christmas.

The closely-watched monthly employment report from the Labor Department is on tap for Friday. The rate of payroll gains has slowed down considerably in recent months, raising worries that the U.S. economy has stopped growing fast enough to dramatically improve the weak labor market. It is expected that the world's biggest economy added 90,000 jobs in June, with the jobless rate holding steady at 8.2%.

The Institute for Supply Management's gauge of service-sector activity fell to 52.1 in June from 53.7 in May, signaling the slowest pace of expansion since January 2010. Economists were expecting a reading of 53.

Meanwhile, many of the biggest American retailers report the their monthly sales on Thursday. Target (NYSE:TGT) said its same-store sales increased 2.1% in June, which was short of the 2.4% expected. Macy's (NYSE:M), the Dow component, saw its sales rise 1.2%, which was also shy of the 1.9% expected.

Crude oil futures initially rose on a bullish inventory report, but then fell back into the red. The Energy Department said oil stocks fell 4.3 million barrels last week, a much bigger draw than the 1.9 million expected. Gasoline inventories were up 151,000 barrels, a smaller build than the 600,000 expected.

The benchmark crude oil contract traded in New York rose 44 cents, or 0.5%, to $87.22 a barrel. Wholesale New York Harbor gasoline rallied 1.5% to $2.76 a gallon.

In metals, gold fell $12.40, or 0.76%, to $1,609 a troy ounce.

Foreign Markets

The Euro Stoxx 50 fell 1.1% to 2278, the English FTSE 100 gained 0.15% to 5642 and the German DAX slipped 0.45% to 6536.

In Asia, the Japanese Nikkei 225 fell 0.27% to 9080 and the Chinese Hang Seng edged up by 0.5% to 19809.