US STOCKS-Markets end lower on jobs data; Nike rises late

                                

                                
 * Weakness in housing, labor market undermines stocks
                                
 * S&P falls below key support level
                                
 * Red Hat, Bed Bath & Beyond rise after results
                                
 * Indexes down: Dow 0.7 pct, S&P 0.8 pct, Nasdaq 0.3 pct
                                
 * For up-to-the-minute market news see [STXNEWS/US]
 (Updates with Nike results, AMD outlook in paragraphs 11 and
12)
                                
 By Ryan Vlastelica
                                
 NEW YORK, Sept 23 (Reuters) - U.S. stocks fell on Thursday
after a weak reading on the labor market dropped stocks through
a key technical level, validating the worries of those who
thought the recent rally was flimsy.
                                
 Major indexes were little changed for most of the day
before the S&P 500 broke below 1,130, the high end of the
summer's trading range. Investors had hoped that the level
would hold despite low trading volume, which raised questions
about the rally's stamina.
                                
 Thursday's volume was very light, with 7.21 billion shares
traded on the New York Stock Exchange, the American Stock
Exchange and the Nasdaq, far below last year's estimated daily
average of 9.65 billion shares.
                                
 "Market technicians had been very positive on our breaking
out of that range, so falling back under it added to the
decline we saw and accelerated our losses," said John
Stoltzfus, senior market strategist at Ticonderoga Securities
in New York. "I think there's a good chance we'll regain that
level, but right now the glass appears half-empty."
                                
 The Dow Jones industrial average <.DJI> ended down 76.89
points, or 0.72 percent, at 10,662.42. The Standard & Poor's
500 Index <.SPX> finished down 9.45 points, or 0.83 percent, at
1,124.83. The Nasdaq Composite Index <.IXIC> fell 7.47 points,
or 0.32 percent, at 2,327.08.
                                
 Jobless claims unexpectedly rose in the latest week, a sign
the labor market still faces headwinds. Existing-home sales
rose in August, but from depressed levels . For details, see
[ID:nN23130114]
                                
 "Weakness in housing and the labor market continues to
create overhead for stocks and suggests that the size of the
rally we've seen this month was probably unwarranted," said Len
Blum, managing partner at Westwood Capital LLC in New York.   
                                
 The S&P 500, coming into Thursday, had gained 8.1 percent
for the month, and some traders noted potential profit-taking
as the quarter-end approached.
                                
 The day's biggest losses came in the financial sector, with
the S&P financial index <.GSPF> off 2 percent. Insurance
companies were the top two percentage decliners among the
index's components, with MetLife Inc <MET.N> down 3.9 percent
at $37.86 and Principal Financial Group Inc <PFG.N> off 3.7
percent to $24.80.
                                
 Big technology companies offset some of the losses on the
Nasdaq, with Nvidia Corp <NVDA.O> up 2 percent to $11.62 and
U.S.-listed shares of Baidu Inc <BIDU.O> up 3.5 percent to
$95.03.
                                
 In action after the closing bell, Advanced Micro Devices
Inc <AMD.N> fell 1.6 percent to $6.30 after it forecast
third-quarter sales would fall from the previous quarter.
[ID:nN23210751]
                                
 Nike Inc <NKE.N> gained 4 percent to $80.79 after the bell
after it reported first-quarter earnings that rose from the
prior year. [ID:nN23213576]
                                
 Adding to investor concerns, European data showed the pace
of growth in the euro zone's services and manufacturing sector
slowing more than expected. Existing-home sales rose in August
by 7.6 percent from a 13-year low recorded in July.
[ID:nN23142491]
                                
 Software maker Red Hat Inc <RHT.N> jumped 9 percent to
$40.07 after posting earnings that beat Wall Street's
estimates, while Bed Bath & Beyond <BBBY.O> rose 3.2 percent to
$43.40 a day after its earnings also topped forecasts.
[ID:nN22266298] and [ID:nN22267954]
                                
  McDonald's Corp <MCD.N> fell 0.7 percent to $74.64 after
it raised its quarterly cash dividend by 11 percent to 61
cents. The move comes a day after fellow Dow component
Microsoft Corp <MSFT.O> raised its dividend but sold off as
investors had been looking for a higher yield. [ID:nSGE68M0GE]
                                
 Bionovo Inc <BNVID.O> soared 57 percent to $1.91 after the
U.S. health regulators accepted the chemistry, manufacturing
and controls plan for its lead drug candidate, Menerba, an
experimental treatment for hot flashes related to menopause.
[ID:nSGE68M0IA]
                                
 Bespoke Investment Group wrote that the top-performing
stocks of the quarter should continue to outperform in the
final week because of window dressing.
                                
 The theory is that "fund managers want to have these names
on their books for clients to see," the firm wrote to clients.
                                
 Declining stocks outnumbered advancing ones on the NYSE by
a ratio of about 7 to 3. On the Nasdaq, about two stocks fell
for every one that rose.
 (Editing by Kenneth Barry)