Stocks Thursday finished at session lows as investors fretted over Intel's (INTC) mid-quarter business update and high oil prices continued to weigh on the broader market.
The Dow Jones industrial average finished down 67.06 points, or 0.65%, to 10,195.91. Pharmaceutical components headed the gainers column while Intel was a significant drag. The broader Standard & Poor's 500-stock index fell 8.36 points, or 0.74%, to 1,116.63. The tech-heavy Nasdaq composite index was down 28.72 points, or 1.44%, to 1,960.26.
After the closing bell Thursday, semiconductor maker Intel soothed some market worries with a positive mid-quarter business update. It said its quarterly revenue forecast would be in a range of $8 billion to $8.2 billion, with a gross profit margin of 60% or 61% amid better-than-expected results in its communications business. Shares bounced higher by 2% in after-market trading.
In Friday's session, investors will also focus on the week's most eagerly awaited economic release -- the May employment report. The update will likely show the economy added more than 200,000 jobs for a third straight month.
The market's attention Thursday was once again dominated by energy price moves, with U.S. crude oil moving lower to around $39 per barrel. Earlier the Organization of the Petroleum Exporting Countries (OPEC) reached an informal agreement to raise oil output by 8%. The increase falls somewhat short of expectations.
The deal will raise output by two million barrels a day immediately, in hopes of easing prices down from the $40 level. Another increase in production is set for August, in an attempt to keep prices from skyrocketing.
In company news, Anheuser-Busch (BUD) won the takeover battle for China's fourth-largest beer maker on Thursday after arch-rival SABMiller withdrew from bidding for Harbin Brewery, according to media reports.
Merrill Lynch (MER) may sell a large part of its asset management unit, according to a report by The New York Times .
Some retailers posted robust monthly sales results. Dow industrials component Wal-Mart Stores (WMT) reported a stronger-than-expected 5.9% increase in May same-store sales in the U.S.
Costco Wholesale (COST) reported a 16% rise in May sales at stores open at least a year, amid strong demand for food and consumer electronics.
Microsoft (MSFT) said it has scrapped plans to roll out an online game meant to help it revive Xbox in Japan.
Thursday featured a full plate of economic data. May non-farm business productivity increased at a revised 3.8% annual rate in the first quarter, which is a slight rise from the 3.5% gain initially reported and better than economists' forecasts for the month.
Initial jobless claims slipped 6,000 to 339,000 in the week ended May 29. The figure was only slightly higher than the 336,000 expected on Wall Street. The four-week moving average has been within a tight range since March, reflecting a rebounding job market.
The Institute for Supply Management's nonmanufacturing index fell to 65.2 in May from the record 68.4 in April. The market had expected a slight drop, to 66. The index has now been above 50 which indicates expansion for the sector -- for 14 months.
Meanwhile, factory orders fell 1.7% in April, a bit worse than the 1.2% drop expected by the market.
Treasury prices finished higher Thursday, as traders covered short positions ahead of Friday's employment report.
In Europe, stocks rebounded to finish higher, despite ongoing nervousness about oil prices. Shares in brewing stocks helped lead the charge.
London's Financial Times Stock Exchange 100 index gained 12.60 point, to 4,421.80. Retailer Marks & Spencer led the loss column after bid terms by a prospective buyer disappointed.
Germany's Xetra DAX index gained 14.56 points, or 0.37%, to 3,902.87. In France, the CAC 40 index added 0.58 point, or 0.02%, to 3,646.81.
Asian markets finished with sharp losses. The Nikkei 225 index lost 215.29 points, or 1.91%, to 11,027.05 on renewed worries over the consequences of higher fuel prices. Hong Kong's Hang Seng index shed 271.82 points, or 2.23%, to 11,929.93, amid worries over interest rate increases.