Most stocks fall on concern over global economic slowdown

Stocks were mixed on Thursday as investors continued to be cautious about the economy in the fourth quarter.

The Dow Jones Industrial Average continued to move steadily higher, up 18.97 points to 13,596.93. The index has been up in seven of the last eight sessions. The Nasdaq Composite Index fell 6.66 points to 3,175.96, and the S&P 500 Stock Index slipped 0.79 points to 1,460.26.

The Department of Labor reported initial claims for jobless benefits in the week ending Sept. 15 fell to 382,000, a decrease of 3,000 from the previous week's revised figure of 385,000. Still, Bank of America (NYSE: BAC) announced it will cut 16,000 jobs before the end of the year.

Commodity prices were little changed. Oil fell 11 cents to $91.87 a barrel. Gold dropped $1.50 to $1,770.20 an ounce.

Caterpillar Inc. (NYSE: CAT) and Citigroup Inc. (NYSE: C) fell more than 1 percent to pace losses among the largest companies. Norfolk Southern Corp. (NYSE: NSC) tumbled 9.1 percent as the rail carrier’s outlook trailed analysts’ projections. Bed Bath & Beyond Inc. (Nasdaq: BBBY) retreated 9.8 percent after reporting second-quarter profit below expectations. ConAgra Foods Inc. (NYSE: CAG) rose 6.2 percent after raising its quarterly dividend and boosting its profit forecast.

“We had a strong rally based on aggressive central bank actions; this week we’re getting the reality that economic activity is weak,” said Alan Gayle, a senior strategist at RidgeWorth Capital Management in Richmond, Va., which oversees about $47 billion. “The slowdown in China is not over, and it is likely that Europe will officially enter into a recession.”

Stocks fell early in the day as global data added to concern about the economy. A Chinese manufacturing survey pointed to an 11th month of contraction, and Japan’s exports fell in August. A separate report showed euro-area services and manufacturing output fell to a 39-month low in September.

Equities pared losses late in the day as the Financial Times reported European Union authorities are helping Spain craft an economic reform program, citing unnamed officials. Federal Reserve Bank of Minneapolis President Narayana Kocherlakota said the U.S. central bank should hold the main interest rate near zero until unemployment falls below 5.5 percent.

Kocherlakota’s comments marked the first time he has linked policy to a specific economic goal. As recently as May, he said the central bank may need to begin an exit from record stimulus as early as year-end.

“Spain moving toward applying for a rescue packing would be bullish for equities,” said Frederic Dickson, who helps oversee about $32 billion as chief market strategist at D.A. Davidson & Co. in Lake Oswego, Ore. “A lot of the money from the Fed’s bond-buying program is going to end up coming back into the financial market, providing a safety net under stocks.”

The S&P 500 climbed to the highest level since 2007 last week after the policy-setting Federal Open Market Committee announced a new round of quantitative easing to spur growth and job creation, while forecasting that the benchmark interest rate will stay at a record low through at least mid-2015. The S&P 500 has advanced 16 percent in 2012, reaching its highest price relative to its members’ expected profits since 2010, as central banks stepped up their effort to sustain growth.

J.C. Penney Co. (NYSE: JCP) fell 11 percent to $25.83 for the biggest decline in the S&P 500. Piper Jaffray & Co. (NYSE: PJC) said Thursday it cannot ignore that the department store chain’s traffic remains “sharply negative.”

Skyworks Solutions Inc. (Nasdaq: SWKS) tumbled the most in the Russell 1000 Index, losing 18 percent to $24.03. Investors were disappointed with the wireless semiconductor company’s projections for chip supplies to Apple Inc.’s (Nasdaq: AAPL) iPhone 5 during an analyst day event, Frederic Ruffy, a senior options strategist at WhatsTrading.com, wrote in a note to clients.

Trading of futures linked to the benchmark for U.S. options prices has risen to a record as investors seek to protect gains in stocks that are approaching all-time highs.