Wall Street Drops Ahead of Jobs Report; Greece Worries Linger
U.S. stocks fell on Thursday, hit by nervousness ahead of Friday's jobs report and lingering uncertainty over a Greece aid deal with creditors.
Declining oil and gold prices also weighed on energy and materials shares, which led declines in the benchmark S&P 500.
Data showed the labor market tightening, with first-time applications for unemployment aid down last week and the number of people on benefit rolls hitting the lowest level since 2000, suggesting the Federal Reserve will remain on track to raise interest rates later this year.
The data came ahead of Friday's key U.S. jobs report, expected to show a 225,000 gain in non-farm payrolls, according to a Reuters estimate.
"The concern is tomorrow and the jobs number, that is where all the focus is," said Tim Ghriskey, chief investment officer of Solaris Group in Bedford Hills, New York. "Probably the concern (is) that it is going to be a good number."
Some investors think stronger jobs numbers could increase chances the Fed could raise rates sooner rather than later.
Adding to investor concerns, Greece delayed a debt payment to the International Monetary Fund due on Friday and German Chancellor Angela Merkel said talks on a cash-for-reforms deal were still far from an agreement.
The Dow Jones industrial average <.DJI> fell 170.69 points, or 0.94 percent, to 17,905.58, the S&P 500 <.SPX> lost 18.23 points, or 0.86 percent, to 2,095.84 and the Nasdaq Composite <.IXIC> dropped 40.11 points, or 0.79 percent, to 5,059.13.
Investors also digested the International Monetary Fund's comment urging the Federal Reserve not to raise rates until there are clear signs of a pickup in wages and inflation.
In a bearish sign, the S&P 500 closed below its 50-day moving average, a key technical indicator.
The S&P materials index <.SPLRCM> fell 1.3 percent, while the energy index <.SPNY> declined 1.2 percent. Oil prices fell for a second day ahead of an OPEC decision which could keep the market oversupplied.
Shares of chemical maker LyondellBasell Industries <LYB.N> shares lost 3.2 percent at $99.48, leading declines in the materials sector.
Delta Air Lines Inc <DAL.N> dipped 0.7 percent to $42.92 after it said its operating profit margin this quarter could be lower than it expected, with airlines hit by weaker U.S. demand. Shares of American Airlines <AAL.O> dropped 2.2 percent to $42.17.
On the plus side, Five Below <FIVE.O> shares jumped 7.6 percent to $37.77 after the teen merchandise retailer increased its full-year forecast.
Declining issues outnumbered advancing ones on the NYSE by 2,374 to 677, for a 3.51-to-1 ratio; on the Nasdaq, 1,994 issues fell and 769 advanced for a 2.59-to-1 ratio favoring decliners.
The S&P 500 posted four new 52-week highs and six new lows; the Nasdaq Composite recorded 83 new highs and 32 new lows.
About 6.2 billion shares changed hands on U.S. exchanges, matching the average for the last five sessions, according to BATS Global Markets.
(By Caroline Valetkevitch; Additional reporting by Chuck Mikolajczak; Editing by Saumyadeb Chakrabarty and Nick Zieminski)