The benchmark averages pared most of Thursday's early losses but still closed in the red as President-elect Donald Trump's press conference on Wednesday continued to weigh on Wall Street.
Selling erupted on Wednesday and continued through most of Thursday as investors focused on what Trump didn't say in his long-awaited speech to the press. Conspicuously absent was any mention of fiscal stimulus plans, tax cuts and easing financial regulations, the expectation of which has fueled a 12% rally in the Dow over the past two months.
As a result, the blue-chip index fell to its lowest level since the beginning of the year on losses in component stocks Disney ( DIS ) and Microsoft ( MSFT ), while the financial sector suffered the steepest losses among S&P 500 sectors.
Pre-market trading was punctuated by mostly bullish economic data and a slew of comments from officials at the Federal Reserve.
Out of the gate was a less than expected drop in weekly jobless claims of 10,000 to 247,000 vs forecasts for a decline of 20,000.
Import and export prices were higher last month with imports costing 0.4% more and export prices up 0.3%.
On the Fed front, Philadelphia Fed President Patrick Harker and Chicago Fed President Charles Evans both expect three rate hikes in 2017, while Dallas Fed President Rob Kaplan sees 2% growth in 2017 without the added benefit of fiscal stimulus.
On the dovish side was St. Louis Fed President Bullard who thinks the Fed can "afford to be patient" on rate changes with inflation still running below target. And finally, Atlanta Fed President, who will retire next month, said 4.6% to 4.7% feels like full employment.
For Friday, Wall Street gets its first look at December inflation measures with the producer price index at 8:30amET. The nominal PPI is expected to increase 0.3% and +0.1% for the core.
Also at 8:30amET is December retail sales, forecasted to increase by 0.7%, +0.5% excluding auto sales, and +0.3% excluding sales of autos and gas.
Business inventories should rise 0.6% in November, more than offsetting a 0.2% decline the month prior.
And finally at 10amET is the preliminary Univ of Michigan consumer sentiment index for January, projected to improve to 98.6 from 98.2 in December.
Here's where the markets stood at the close:
Dow Jones Industrial Index was down 63.28 points (-0.32%)
S&P 500 was down 4.88 points (-0.21%)
Nasdaq Composite Index was down 16.16 points (-0.29%)
FTSE 100 was up 0.03%
Nikkei 225 was down 1.19%
Hang Seng Index was down 0.46%
Shanghai China Composite Index was down 0.56%
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