* Index of mid-Atlantic factory activity drops
* Weekly jobless benefits claims unexpectedly rise
* Dow off 0.3 pct; S&P off 0.3 pct; Nasdaq off 0.2 pct
* For up-to-the-minute market news see []
(Updates to late afternoon)
By Edward Krudy
NEW YORK, June 17 (Reuters) - U.S. stocks fell on Thursday
as slowing regional factory activity and jobless claims
underscored worries about the pace of the economic recovery.
Shares of manufacturers fell, including 3M Co <MMM.N>,
which was down 0.6 percent at $80.43, while the consumer
discretionary sector also dragged the market lower. The S&P
retail index <.RLX> declined 1.5 percent.
The Philadelphia Federal Reserve Bank said its June
business activity index showed its slowest growth in 10 months,
while the number of people filing for unemployment insurance
unexpectedly increased in the latest week. For details, see
[]
The data comes at an anxious time for investors who worry
that government austerity measures in Europe and tighter money
policies in Asia could slow the world's economic recovery.
"The economy continues to take three steps forward and two
steps back, and this week thoroughly has been driven by the two
steps back," said David Katz, chief investment officer at
Matrix Asset Advisors.
The Dow Jones industrial average <> dropped 29.78
points, or 0.29 percent, to 10,379.68. The Standard & Poor's
500 Index <.SPX> slipped 2.84 points, or 0.25 percent, to
1,111.77. The Nasdaq Composite Index <> fell 3.66 points,
or 0.16 percent, to 2,302.27.
The S&P 500 hovered around its 200-day moving average at
1,109.11 after having broken past that level this week for the
first time in a month. A sustained move above the level would
be seen as bullish by chart-minded investors.
Katz said that despite the stuttering economy, signs from
corporations continued to be good, adding he expected earnings
to drive stocks.
An example of good corporate news was Apple Inc <AAPL.O>,
whose shares touched a lifetime high at $272.90 a day after the
company said it sold more than 600,000 units of its new iPhone.
Its shares were last up 1.7 percent at $271.76.
There were some signs of recovery in companies involved in
the Gulf of Mexico oil spill.
U.S.-traded shares of Transocean <RIG.N>, up 5.8 percent at
$49.73, were on track to close above their 14-day moving
average for the first time since April 26.
The daily moving average convergence-divergence, or MACD,
of the U.S. shares of BP Plc <BP.L><BP.N> generated a 'sell'
signal on April 22, and it has not been able to reverse that
trend.
BP was nearing another bullish signal, nonetheless, as the
relative strength index, at 32.4, was close to the 30 level
that indicates the shares could be oversold. BP shares fell 0.9
percent to $31.56.
Home builder stocks lost ground a day after luxury home
builder Toll Brothers Inc <TOL.N> said a decline in consumer
confidence has led to fewer people looking to buy a home. Its
shares declined 3.9 percent to $18.04 while KB Home <KBH.N>
fell 2.6 percent to $12.60.
Investors are also worried that the expiration of a home
buyer tax credit could hit the sector. The Morgan Stanley
housing index <.HGX> dropped 2.4 percent.
Fred Dickson, chief market strategist, D.A. Davidson & Co.
Lake Oswego, said volatility could increase because of options
and futures expirations on Thursday and on Friday.
The quadruple witching period, as it is called, refers to
the quarterly settlement and expiration of four different types
of June equity futures and options contracts.
(Reporting by Edward Krudy; Editing by Kenneth Barry)
