NEW YORK?? U.S. stocks slipped Thursday after data showed new U.S. jobless claims rose unexpectedly last week, further evidence of a weak labor market ahead of President Barack Obama's speech unveiling his plan to stimulate jobs growth.
Applications for unemployment benefits rose to 414,000 in the week ending September 3 from an upwardly revised 412,000 the prior week, the Labor Department said on Thursday. Wall Street analysts had been looking for a dip to 405,000.
Investors mostly shrugged off news that the U.S. trade deficit narrowed much more than expected in July as strong Latin American demand helped push exports to a new record and imports fell slightly.
The trade gap totaled $44.8 billion, 13.1 percent less than in June and well below a consensus forecast of $51.0 billion from Wall Street analysts surveyed before the report. It was the biggest month-to-month percentage drop in the deficit since February 2009.
"The trade balance was better than expected despite worse jobless claims, so that could move up (gross domestic product) estimates, and that is why we probably didn't go down more than what we should have on the number," said Sam Ginzburg, head of capital markets at First New York in New York.
The Dow Jones industrial average dropped 27.81 points, or 0.24 percent, to 11,387.05. The Standard & Poor's 500 Index fell 5.46 points, or 0.46 percent, to 1,193.16. The Nasdaq Composite Index shed 8.18 points, or 0.32 percent, to 2,540.76.
After last Friday's dismal U.S. nonfarm payroll data, investors will closely watch Obama's televised speech to Congress at 7 p.m. EDT. The president is expected to propose tax cuts for middle-class households and businesses and new spending to repair roads, bridges and other infrastructure.
Federal Reserve Chairman Ben Bernanke will deliver a speech on the U.S. economic outlook to the Economic Club of Minnesota at 1:30 p.m. EDT but he is unlikely to outline new measures to boost the economy.
"I want to hear what Bernanke has to say, I want to hear what Obama has to say, which in turn is going to make Friday, for our market, a very interesting day," said Ginzburg.
The European Central Bank signaled that its interest rate rise cycle had been halted, saying euro zone inflation risks were no longer skewed to the upside and economic growth would be slow at best. European stocks were little changed.
Reuters contributed to this report.
Source: http://www.msnbc.msn.com/id/44437657/ns/business-stocks_and_economy/
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