U.S. stocks fell on Thursday after data showed signs of slower growth ahead for the U.S. economy, with traders zoning in on technical factors to anticipate the market's next move.
The S&P 500 briefly traded below its 50-day moving average for the first time this year, an indication that the market's medium-term uptrend could be in peril after this week's strong declines.
The level was also the floor of the trading range during the last month, making 1,543 a key technical support, according to Richard Ross, global technical strategist at Auerbach Grayson in New York.
The Nasdaq 100 and the Russell 2000 indexes have both closed below their 50-day averages this week, adding to the overall technical pressure on the market.
The Dow Jones industrial average fell 37.11 points or 0.25%, to 14,581.48, the S&P 500 lost 4.91 points or 0.32%, to 1,547.1 and the Nasdaq Composite dropped 24.54 points or 0.77%, to 3,180.13.
Stocks opened slightly higher but slid after data showed factory activity in the Mid-Atlantic region cooled in April and the index of leading indicators, a gauge of future U.S. economic activity, fell in March for the first time in seven months.
These numbers comprised the latest data to indicate a step-back in the economy as tighter fiscal policy began to weigh.
Equities have been whipsawed in the past three sessions, with a 1% move in either direction in the S&P 500 each day this week, the first such streak of volatility for the index since the start of February.
The CBOE Volatility Index or VIX, Wall Street's favorite barometer of investor anxiety, was up 3.2%.
The S&P 500's healthcare sector led the declines, with UnitedHealth Group Inc down 3.2% at $60.06 after the insurer lowered its 2013 revenue outlook.
Morgan Stanley reported a stronger-than-expected first-quarter profit but revenue from fixed-income and commodities trading fell sharply from a year earlier, reflecting declines in interest rates and commodity prices. Morgan Stanley's stock lost 4.2% to $20.56.
Verizon Communications and PepsiCo were among the bright spots on the bulls' side after posting higher than expected earnings.
Verizon's stock gained 3.6% to $51.31 and PepsiCo jumped 3.6% to $81.67.
Shares in the energy sector helped pare losses as Peabody Energy, the world's largest private sector coal miner, rose more nearly 10% after reporting a smaller-than-expected first-quarter loss.
Brent crude oil rose as low prices after a six-session losing streak attracted bargain hunters, further supporting energy shares. Exxon and Chevron both rose 1%.
S&P 500 earnings are now expected to have risen 1.9% in the first quarter, up from the 1.5% estimate at the start of the month, based on actual results from 82 companies and estimates for the rest.
