Slower-than-expected growth in the dominant U.S. services sector drove the day's trading. The retail sector dragged the market lower after several chains, including Target Corp
Ryan Larson, head of equity trading at RBC Capital Management, said muted reactions to recent signs of economic weakness suggest some investors are counting on more monetary stimulus from the Federal Reserve if the data gets worse.
"You are going back to 'bad numbers are good numbers'," he said, referring to the latest change in Wall Street's perception of discouraging data. "The market will believe that (Fed Chairman) Bernanke & Co will have to step in."
The Dow Jones industrial average <.DJI> dropped 61.98 points, or 0.47 percent, to 13,206.59 at the close. The Standard & Poor's 500 Index <.SPX> fell 10.74 points, or 0.77 percent, to 1,391.57. The Nasdaq Composite Index <.IXIC> lost 35.55 points, or 1.16 percent, to 3,024.30.
Initial jobless claims posted their biggest weekly drop since May 2011 and countered Wednesday's weaker report on private-sector hiring. [ID:nOAT3GE83T]
The Institute for Supply Management's report on Thursday showed the pace of growth in the large U.S. services sector slowed more than expected in April, with drops in both new orders and employment. That was in contrast to the ISM's report on Tuesday, which showed U.S. manufacturing activity picked up in April.[ID:nL1E8G34DG]
"This is a continuation of the volatility and fits and starts we've seen in economic data, and that's causing investors to take a wait-and-see attitude before tomorrow," said Chuck Carlson, chief executive of Horizon Investment Services LLC in Hammond, Indiana.
NYMEX- NEW YORK, May 3 (Reuters) - U.S. crude futures fell for a second straight day on Thursday, tumbling more than 2 percent on data indicating slowing economic growth and on increased OPEC production that the group's secretary general said is intended to curb high prices.
Friday's closely watched U.S. April nonfarm payrolls report is forecast to show the economy added 170,000 jobs. That would be a rebound from the addition of a meager 120,000 jobs in March. [ID:nL1E8G1MO3]
OPEC's secretary general said the group is working hard to bring down oil prices and is pumping much more than its official target even as exports from cartel-member Iran dwindle. [ID:nL5E8G358A]
Higher crude production from Saudi Arabia and data showing U.S. crude inventories have risen six straight weeks have helped pull crude futures back from 2012 peaks reached in the first quarter.
* On the New York Mercantile Exchange, June crude
* The five permanent members of the U.N. Security Council put pressure on Iran to allay international concern about its nuclear program, and said they expected talks with Tehran to lead to concrete steps toward a negotiated solution. [ID:nL5E8G39E0]
* The UAE's oil pipeline for bypassing the Strait of Hormuz is complete and exports are expected to start within three months, UAE Oil Minister Mohammed al-Hamli said. [ID:nL5E8G3FNB]
* Seaborne oil exports from OPEC, excluding Angola and Ecuador, will fall by 360,000 barrels per day (bpd) in the four weeks to May 19, UK consultancy Oil Movements said in its latest weekly estimate. [ID:nL5E8G3HSN]
* Crude inventories at the Cushing, Oklahoma, oil hub rose by 1 million barrels from April 27 to May 1 to hit a fresh record, according to a report by industry data provider Genscape. [ID:nL1E8G3EAV]
CBOT SOYBEAN- Chicago Board of Trade soybean futures fell 0.8 percent, hitting a one-week low on long liquidation and bearish chart signals, traders said.
* Nearby contracts posted the biggest losses as traders unwound long old crop/short new crop spreads.
* Most-active July soybeans
* Commodity funds hold a record net long in CBOT soybeans, leaving the market open to bouts of long liquidation.
* Soyoil futures felt additional pressure from 2.5 percent decline in U.S. crude oil futures.
* Market underpinned by tightening global soy supplies. The Buenos Aires Grains Exchange lowered its forecast of Argentina's 2011/12 soybean harvest to 41 million tonnes, from 43 million previously. [ID:nE6E7N6058]
* CIF soybean basis bids at the U.S. Gulf were mostly steady to firm, underpinned by good export demand from China which bought more new-crop supplies overnight, traders said.
* Deliveries on CBOT May soybeans totaled 40 contracts; no deliveries on May soymeal and 1,462 contracts delivered on May soyoil.
* USDA's weekly export sales report showed net export sales of U.S. soybeans last week at 1,732,000 tonnes, above estimates for 1,000,000 to 1,500,000 tonnes. [ID:nIGB03ED70]
* USDA confirmed sales of 232,000 tonnes of U.S. soybeans to China for delivery in 2012/13. [ID:nC3E7N602M]
* Some Chinese soy crushers could turn to cheaper government stockpiles as Chicago Board of Trade prices soar and supplies from South America dwindle, traders in Beijing said. [ID:nL4E8G34JK]
* CME Group said it would delay an expansion in electronic trading hours for grains by one week, starting with trading date May 21. [ID:nL4E8G37SJ]
FCPO- SINGAPORE, May 3 (Reuters) - Malaysian palm oil futures extended losses to a six-week low on Thursday, as disappointing economic data from the United States and Europe cast doubts on global economic recovery and commodity demand.
Palm oil futures ended at 3,370 ringgit, a level last seen on March 23, as investors reacted to a slew of data that signalled stagnant hiring and weak manufacturing activity. [ID:nL1E8G1KLS][ID:nL5E8G223R]
"It's very much the global sentiment. Fundamentally palm oil is still bullish because supply is still facing issues. The tree stress is already confirmed, so the next catalyst will be the Malaysian Palm Oil Board numbers," said Alan Lim, research analyst with Kenanga Investment Bank in Kuala Lumpur.
Benchmark July palm oil futures
Traded volumes stood at 33,591 lots of 25 tonnes each, way higher than the usual 25,000 lots.
Traders are now looking at production numbers for clues on market movement as strong exports in April failed to lift the market. Industry regulator Malaysian Palm Oil Board will issue official data on output and stocks next week.
Lower output will further eat into palm oil stocks, which fell below 2 million tonnes in March.
Demand for the edible oil seems to be healthy as indicated by cargo surveyor data. April exports jumped by 9.4 and 10.4 percent from a month ago, according to Intertek Testing Services and Societe Generale de Surveillance respectively. [PALM/ITS] [PALM/SGS]
On the technicals front, a bearish target for palm oil at 3,397 ringgit has been revised lower to 3,370 ringgit, said Reuters market analyst Wang Tao. [ID:nL4E8G315X]
REGIONAL EQUITY- BANGKOK, May 3 (Reuters) - Philippine stocks hit an all-time high on Thursday spurred by optimism over the economy and strong earnings outlook of a consumer conglomerate.
But markets elsewhere in Southeast Asia posted modest gains because of concerns over the strength of global growth.
The Philippine main index <.PSI> ended up 1.37 percent at 5,300.41. Shares in food-to-property firm Alliance Global Group Inc
"I think the market optimism was about the first quarter GDP growth which market is expecting the figure to be higher than consensus," said a Manila-based trader.
"Consumer conglomerate earnings are standing out and there's a good buying interest in the sector today," he said.
According to Thomson Reuters data, the Manila bourse had steady foreign inflows so far this week, taking in $230 million on Wednesday when the main stock index also finished at a record closing high.
