By Kate Gibson
NEW YORK (MarketWatch) -- U.S. stocks fell Thursday as the U.S.
dollar recovered from an eight-month low against the euro, hitting
commodities and related stocks and denting enthusiasm created by a
drop in jobless claims.
"The equities market started off on a positive footing, with
modest gains, due to the fact that weekly jobless claims finally
fell below the 450,000 level for the first time in several months,"
said Michael Sheldon, chief market strategist at RDM Financial
Group.
"The dollar continued to move lower, helping commodity prices
early on, however a very -- and you can emphasize the word 'very'
-- modest bounce in the dollar has taken some of the wind out of
the sails of commodity-related stocks," Sheldon added.
After rising to within a few points of the psychologically
significant 11,000 level, the Dow Jones Industrial Average (DJI)
was off 50.56 points, or 0.5%, to 10,917.09, with 22 of its 30
components in retreat. The declines were led by a 1.5% drop in
Alcoa Inc. (AA), which is slated to release third-quarter financial
results after the close, the first blue chip to report.
The S&P 500 (SPX) fell 5.72 points, or 0.5%, to 1,154.25,
with natural-resource firms down the most among its 10 industry
groups.
The Nasdaq Composite (RIXF) shed 4.45 points, or 0.2%, to
2,376.21.
For every five stocks rising, nine fell on the New York Stock
Exchange, where volume totaled 505 million as of 1:45 p.m. Eastern
time.
The dollar rebounded against the euro, which had pushed to a new
eight-month high above $1.40 after European Central Bank President
Jean-Claude Trichet's remarks were deemed not excessively
bearish.
The dollar index (DXY), which contrasts the greenback with six
currency rivals, stood at 77.616, off from its 77.397 level in late
New York trade Wednesday.
Crude-oil futures fell nearly $2 to $81.35 a barrel on the New
York Mercantile Exchange, while gold futures fell $12.70 to end at
$1,335 an ounce.
The weekly jobless-claims data came a day before the release of
the government's monthly employment report, with economists
expecting the unemployment rate to climb to 9.7% in September from
9.6% in August.
Retailers including Abercrombie & Fitch Co. (ANF) and
Limited Brands Inc. (LTD) reported better-than-anticipated monthly
sales.
PepsiCo Inc. shares (PEP) fell after the beverage company
lowered its earnings forecast. .