NEW YORK — Stocks slipped Thursday after the government reported an increase in applications for unemployment benefits last week.
The Labor Department said Thursday that 409,000 people made first-time claims for benefits. That’s up 18,000 from the previous week, when applications fell to their lowest level in more than two years. The number of applications suggests that companies are adding jobs but slowly.
The report came a day after Automatic Data Processing estimated that companies added nearly 300,000 jobs last month, far more than the 100,000 economists expected. That report pushed stock prices higher and Treasury prices lower as investors became more optimistic about the job market.
“At worst, unemployment is flat. At best, it’s coming down,” said James O’Sullivan, chief economist at MF Global in New York.
In a week with several reports on employment, the most important one will arrive this morning when the Labor Department releases its monthly survey of all U.S. payrolls and the unemployment rate. Economists expect the rate fell to 9.7 percent in December from 9.8 percent the previous month.
“This market’s been extended almost one direction ever since the end of August,” said Keith Wirtz, chief investment officer at Fifth Third Asset Management in Cincinnati. “So you’ve got a lot of active managers asking, ‘Will news flow encourage more money behind stocks?’ “
Labor Department data showed the average number of applications for jobless benefits over the past four weeks dropped to 410,750, the lowest level since July 2008.
Many retailers fell after reporting weaker sales in December. Target fell 7 percent to $54.93, and Gap fell 7 percent to $20.70. Macy’s fell 4 percent to $23.97. A blizzard in the Northeast hurt sales after Christmas. Retail sales were strong in November because many customers shopped earlier in the holiday season. Analysts still expect overall retail spending in November and December to have increased by the largest amount since 2006.
The Dow Jones industrial average fell 25.58 points, or 0.2 percent, to close at 11,697.31.
The Standard & Poor’s 500 fell 2.71, or 0.2 percent, to close at 1,273.85. The Nasdaq composite rose 7.69, or 0.3 percent, to 2,709.89.
