US stocks pare losses on Portugal bank concerns

U.S. stocks ended lower Thursday after paring steep losses earlier in the day, as renewed worries over one of the top Portugal banks spooked investors.
The Dow Jones Industrial Average lost 70.54 points, or 0.42 percent, to 16,915.07. The S&P 500 fell 8.15 points, or 0.41 percent, to 1,964.68. The Nasdaq Composite Index dropped 22.83 points, or 0.52 percent, to 4,396.20.
The dip came after major stock indices in Europe closed down sharply Thursday as investors jittered over Banco Espirito Santo, a leading Portuguese lender, which delayed payments on short-term debt.
The bank worries offered an excuse for investors to take money off the table when major U.S. equity indices neared record highs.
However, the market recovered part of earlier losses in later trading session, as investors were reassured by a pair of positive U.S. economic data which showed that the world's largest economy remained on track.
In the week ending July 5, the advance figure for seasonally adjusted initial claims was 304,000, a more-than-expected decrease of 11,000 from the previous week, the U.S. Labor Department said Thursday. The four-week moving average, a smoother gauge, was 311, 500, down 3,500 from the prior week.
Meanwhile, U.S. wholesale inventories, a key component of gross domestic product (GDP) changes, rose 0.5 percent in May from April, slightly lower than market consensus, but still signaling a pickup in momentum for the U.S. economy in the second quarter of this year.
The U.S. GDP contracted 2.9 percent unexpectedly in the first quarter with abnormally cold weather to blame in a large part.
Investors were also paying close attention to the new earnings season from which investors would garner any clues about how U.S. companies had been faring in the second quarter.
According to Thomson Reuters I/B/E/S, so far roughly 5 percent of the S&P 500 companies, or 23 companies, have reported results in the second quarter, of which 65.2 percent beat analyst expectations on earnings side while 69.6 percent surpassed market consensus on revenues side.
On the previous trading day, Wall Street added earlier gains, recovering from a two-day drop, as the Federal Reserve's minutes of its latest policy meeting gave no surprise to the market.
The CBOE Volatility Index, often referred to as Wall Street's fear gauge, soared 8.07 percent to end at 12.59 on Thursday.
In other markets, crude prices Thursday bottomed out from recent low levels as some investors took profits from a long losing streak. Light, sweet crude for August delivery climbed 64 cents to settle at 102.93 U.S. dollars a barrel on the New York Mercantile Exchange, while Brent crude for August delivery increased 39 cents to close at 108.67 dollars a barrel.
Gold futures on the COMEX division of the New York Mercantile Exchange continued to move up Thursday as investors fled to safe- haven gold amid concerns over Portugal banking sector, with the most active gold contract for August delivery up 14.9 dollars, or 1.13 percent, to settle at 1,339.2 dollars per ounce.
The U.S. dollar recovered against most major currencies Thursday and snapped a three-day drop versus the euro after worries over the Portuguese bank spread in the euro zone.
In late New York trading, the euro fell to 1.3603 dollars from 1.3645 dollars of the previous session, and the British pound decreased to 1.7143 dollars from 1.7156 dollars.