US stocks turn lower in afternoon trading

NEW YORK (AP) — The stock market fell in afternoon trading Thursday, putting it in line for its first three-day loss this year.

The Dow Jones industrial average slipped 65 points to 14,895 as of 1:30 p.m., a drop of 0.4 percent. Chevron led the Dow lower, losing $2.29, or 2 percent, to $119.27.

Wall Street followed European markets lower after European Central Bank President Mario Draghi disappointed investors by signaling that the bank wouldn’t take more steps to shore up Europe’s ailing economy.

Prices for U.S. government bonds and gold rose sharply as traders shifted money away from stocks and into lower-risk assets.

The next big focus for traders is Friday’s government report on U.S. employment.

The U.S. stock market moved between small gains and losses in the morning, then headed lower at midday following a decline in European markets.

The Standard & Poor’s 500 index fell seven points to 1,600, down 0.4 percent. The Nasdaq composite fell 15 points, or 0.5 percent, to 3,385.

Financial markets have turned volatile over the past two weeks as traders parse comments from Federal Reserve officials for hints about when the bank will cut back on its support for the economy.

The Dow is coming off two days of losses. The 30-stock average has managed to go without a three-day losing streak since December 28, a record 108 trading days, according to Schaeffer’s Investment Research.

A batch of weak economic reports sent the stock market plunging to its lowest level in a month on Wednesday. The Dow had its biggest one-day loss in seven weeks and closed below 15,000 for the first time since May 6.

Long-term interest rates are expected to rise as the economy improves and the Fed scales down its monthly purchases of $85 billion in bonds. Rates remain near historically low levels.

“As interest rates come back to more normal levels, it’s probably going to cause volatility,” said Tim Speiss, chairman of the personal wealth advisers practice at EisnerAmper. “But that should be viewed as healthy.”

In the market for U.S. government bonds, the yield on the 10-year Treasury note sank as demand rose for U.S. government debt. The yield fell to 2.03 percent, a big drop from 2.09 percent late Wednesday.

In Europe, government bond yields rose and stock indexes fell after the European Bank chief said the bank wouldn’t take more action to prop up the region’s economy.

The yield on Spain’s 10-year government bond spiked to 4.65 percent from 4.41 percent as demand for the bonds plunged.

Stock markets fell 2.6 percent in Italy, 1.2 percent in Germany, 1 percent in France.

Gold jumped $16 to $1,414 an ounce. The price of crude oil crossed above $95 per barrel following a report from the Energy Department that the country’s oil supply shrank last week.

Early Thursday, the Labor Department said that the number of Americans applying for unemployment benefits fell by 11,000 last week to 346,000, a level that’s consistent with steady job growth.

Speiss called the drop in claims a “good sign.” The figures tend to fluctuate sharply week to week. Speiss said it’s far from certain that the government’s monthly employment survey will give investors anything to cheer on Friday. Economists predict that employers added 170,000 jobs last month. A report that’s much better or worse than expected can drive trading for weeks afterward.

The market is off to a rough start in June. After just three full days of trading, the S&P 500 has lost 1.7 percent. The Dow has lost 1.5 percent.

Among other stocks making big moves:

— L Brands, the owner of Victoria’s Secret and Bath and Body Works, fell $1.16, or 2.2 percent, to $50.50. The company reported sales growth in May that came in below financial analysts’ estimates.

— VeriFone Systems plunged 18 percent. After the market closed Wednesday, the provider of terminals for credit-card payments reported quarterly results that fell short of financial analysts’ estimates. The lower results were a result of a charge for legal fees and sliding sales. VeriFone also forecast earnings of 20 cents in the current quarter, half of what analysts had forecast. The company’s stock sank $4.02 to $17.95.

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