Stocks edged lower in morning trading Thursday as investors considered new data on applications for unemployment benefits and an index meant to forecast growth in the U.S. economy. Kroger was among the big risers after the supermarket operator raised its earnings forecast for the year.
KEEPING SCORE: The Standard & Poor's 500 index fell two points, or 0.1 percent, to 1,954 as of 11:20 a.m. Eastern Time. The Dow Jones industrial average shed 28 points, or 0.2 percent, to 16,878. The Nasdaq composite slid nine points, or 0.2 percent, to 4,352.
RECORD TERRITORY: The S&P 500 index hit a record high close Wednesday, it's second in less than two weeks. The index is up 5.9 percent this year. The latest rally came after the Federal Reserve said it sees improvement in the U.S. job market and signs of modest inflation. The Fed said it intends to keep short-term interest rates low.
JOBLESS AID: Fewer Americans sought unemployment benefits last week, evidence of a stronger job market as fewer workers lose their jobs. The Labor Department said Thursday that weekly applications for unemployment fell to a seasonally adjusted 312,000, the lowest in more than six years.
ECONOMIC BAROMETER: The Conference Board said Thursday that its index of leading indicators increased 0.5 percent last month, an improvement from a revised 0.3 percent gain in April. The latest reading provides further evidence that the U.S. economy is gaining strength after a harsh winter.
THE QUOTE: Applications for unemployment aid last week came in lower than expected, but were still above 300,000, signaling the recovery remains sluggish, said Chris Gaffney, a senior market strategist at EverBank Wealth Management.
"The U.S. economy is definitely still recovering, not at the pace that anyone would like, and the labor market is recovering, but slower than everyone would like," Gaffney said. "So it's still kind of a slow, boring market right now."
SECTOR WATCH: Six of the 10 sectors in the S&P 500 index fell, led by materials stocks. Utilities rose the most. The sector is up 14.7 percent this year as investors have piled into stocks that offer higher yields.
SUPER MARKETS: Kroger jumped 5.9 percent after the nation's biggest supermarket chain reported higher profit and raised its earnings forecast for the year. Kroger rose $2.78 to $50.05.
DRUGSTORE WOES: Rite Aid reported its fiscal first-quarter earnings sank 55 percent due to higher-than-expected drug costs and other expenses. The stock fell 22 cents, or 3 percent, to $7.23.
OUSTED: American Apparel jumped 6.3 percent on news that the clothing chain's board ousted founder Dov Charney as chairman and moved to fire him as CEO, citing an "ongoing investigation into alleged misconduct." The stock rose 4 cents to 68 cents.
OVERSEAS: World stocks rallied, getting a lift from Wednesday's Federal Reserve update. Germany's DAX rose 0.8 percent while France's CAC-40 gained 0.9 percent. The FTSE 100 index of leading British shares added 0.2 percent. Japan's Nikkei 225 jumped 1.6 percent to end at 15,361.16. Hong Kong's Hang Seng was little changed while South Korea's Kospi edged up 0.1 percent.
BOND MONITOR: The yield on the 10-year Treasury note held at 2.59 percent.