Stocks fell a sixth-consecutive session Thursday as concern increased about global economic growth and corporate earnings. The market pared earlier losses as Procter & Gamble and Merck rallied nearly 4%, while a Standard & Poor's index of home builders jumped more than 2%.
The S&P 500 ended down 6.69 points, or 0.5%, at 1334.76, rebounding from an earlier drop of as much as 1.2%. The benchmark index has lost 2.6% over six sessions. The Dow Jones industrial average fell 31.26 points, or 0.2%, to 12,573.27. The Nasdaq composite slid 21.79 points, or 0.8%, to 2866.19.
"There's a worldwide slowdown," says Nick Sargen, chief investment officer at Fort Washington Investment Advisors. "Analysts have been reducing their second-quarter earnings estimates as companies have guided them lower. Profit growth, which has been a main driver for the market, will be less supportive going forward."
The S&P 500 closed little changed Wednesday as investors sifted through minutes of last month's Federal Reserve meeting for hints of additional stimulus. The Federal Open Market Committee's June 19-20 meeting debated the need for further stimulus measures, the minutes showed. Two participants supported additional bond purchases, while two others said only more economic deterioration would warrant them.
Stocks moved lower earlier Thursday as Labor Department figures showed applications for first-time claims for unemployment benefits decreased by 26,000 in the week ended July 7 to 350,000, the fewest since March 2008. Economists forecast 372,000 claims, a Bloomberg News survey found. The decline reflected the volatility of claims during the annual auto-plant retooling.
An Australian report showed that country's employers cut payrolls by 27,000 workers in June, whereas economists in a Bloomberg survey had forecast no change. The Bank of Japan altered its stimulus program Thursday, without adding extra money. In Seoul, the Bank of Korea unexpectedly cut its key interest rate. Data today may show China's economic growth fell below 8% for the first time since 2009, according to the median estimate in a Bloomberg News survey.
Bank of America strategists lowered their earnings forecasts for S&P 500 companies by 1.4% for this year and next, citing falling commodity prices and slower global growth prospects. Warren Buffett, the billionaire chairman of Berkshire Hathaway, told CNBC that economic growth in the U.S. is slowing even as the housing market shows signs of rebounding.
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