US STOCKS-Wall St falls as dollar weighs after jobs data

                                
   * Initial jobless claims edge up, less than forecast
                                
 * USD firms against basket of major currencies, oil down
                                
 * Stocks down: Dow 0.3 pct, S&P 0.3 pct, Nasdaq 0.5 pct
                                
 * For up-to-the-minute market news, click STXNEWS/US
  (Adds details, updates prices)
                                
 By Angela Moon
                                
 NEW YORK, Jan 7 (Reuters) - U.S. stocks were down on
Thursday alongside weak global markets as the U.S. dollar
strengthened after the government reported a slight increase in
initial jobless claims.
                                
 According to the Labor Department, initial jobless claims
rose from last week, but less than forecast. For details, see
[ID:nN07186233]
                                
 The data did little to move equities ahead of the closely
watched monthly non-farm payrolls report on Friday. Economists
look for a loss of 8,000 non-farm jobs after a surprisingly
small total of 11,000 job losses in November.
                                
 "We are continuing to see consolidation after the huge
rally on Monday that caught people by surprise ... and with the
big unemployment data out tomorrow, we are seeing a lot of
hesitance, a lot of people staying on the sidelines," said Paul
Brigandi, vice president of trading at Direxion Funds in New
York.
                                
 The Dow Jones industrial average <.DJI> was down 33.86
points, or 0.32 percent, at 10,539.82. The Standard & Poor's
500 Index <.SPX> was down 3.15 points, or 0.28 percent, at
1,133.99. The Nasdaq Composite Index <.IXIC> was down 12.03
points, or 0.52 percent, at 2,289.06.
                                
 On the first day of trading in 2010, major indexes rallied
to their highest closes in more than 15 months.
                                
 The U.S. dollar <.DXY> gained 0.6 percent against a basket
of major currencies, underpinned by weak German and euro zone
data as well as comments from Japan's new finance minister that
he wanted the yen to weaken more.
                                
 February crude oil futures <CLc1> fell 0.6 percent as signs
of tighter monetary policy in China sparked concerns about
demand.
                                
 Materials and energy stocks were pressured, with Alcoa Inc
<AA.N> down 3.4 percent at $16.40 and Exxon Mobil Corp <XOM.N>
off 0.4 percent at $69.74.
                                
 The S&P retail index <.RLX> added 0.7 percent after U.S.
retailers posted better-than-expected December sales and many
raised profit forecasts. [ID:nN07165754]
                                
 Sears Holding Corp <SHLD.O> rose 13.6 percent to $100.95
after the department store chain posted higher sales for
December.
                                
 But Abercrombie & Fitch Co <ANF.N> shares fell 7.4 percent
to $33.55 after the apparel retailer reported December
same-store sales fell 11 percent. [ID:nWNBB6189]
                                
 St. Louis Fed President James Bullard said Thursday the
U.S. labor market is improving and the economy is close to the
point where unemployment will start to fall. For details, see
[ID:nTOE60607D]
                                
 European stocks were down 0.5 percent around midday in
their first broad retreat this year.
  (Reporting by Angela Moon; editing by Jeffrey Benkoe)