NEW YORK?Wall Street limited its losses Thursday as investors were rattled by data showing a weaker-than-expected labor market and fears of deepening fiscal woes in Greece.
The Dow Jones Industrial Average shed 53.13 points (0.51 percent) to close at 10,321.03, after partially recovering from an early plunge of more than 185 points.
The tech-dominated Nasdaq ended with a loss of 1.68 points (0.08 percent) at 2,234.22 and the broad Standard & Poor's 500 index dipped 2.30 points (0.21 percent) to 1,102.94.
Global markets were under pressure as credit agencies warned of further downgrades to Greece, which could hurt the country's efforts to tackle its debt crisis.
Closer to home, the market shuddered after the US Labor Department said new claims for US jobless benefits jumped to a three-month high, underscoring ongoing struggles for the labor market and the economic recovery.
The seasonally adjusted initial claims in the week ending February 20 rose to 496,000, an increase of 22,000 from the previous week's revised figure of 474,000, the department said.
Analysts said that if the jobs picture fails to improve, that could spell trouble for the recovery from recession.
"There were hopes that we could start seeing the job losses turn into job gains, but that is not likely to be the case," said Joel Naroff at Naroff Economic Advisors.
"I am expecting a fairly significant drop in payrolls and a major spike in the unemployment rate" in February data to be released next week, Naroff said.
But some said the figures may have been skewed by bad weather and that the trend still may be improving.
Peter Newland at Barclays Capital said the rise reflects "an administrative backlog following the holiday season and then as a result of distortions relating to unusually bad weather conditions."
Some analysts said traders were encouraged when the indexes held at key technical support levels.
"The Dow bounced back today after finding support at its 20-day moving average, and notched its eighth consecutive close atop its 10-day trendline," said Elizabeth Harrow at Schaeffer's Investment Research.
Among stocks in focus, Dow component Coca-Cola slid 3.7 percent to $53.12 after announcing it would buy the North American operations of its main bottler, Coca-Cola Enterprises, which jumped 32.85 percent to $25.48.
Rival beverage giant PepsiCo added 0.35 percent to $62.30.
Palm, a pioneer of handheld devices, plunged 19.28 percent to $6.53 after lowering its 2010 guidance. The company forecast a revenue range of $285-310 million in the third quarter, sharply below the consensus forecast of $424 million.
Apple increased 0.67 percent to $202 after announcing the 10 billionth song was downloaded from Apple's iTunes on Wednesday, seven years after the launch of the online store.
Bonds gained in the selloff. The yield on the 10-year Treasury bond fell to 3.642 percent from 3.695 percent Wednesday and that on the 30-year bond eased to 4.582 percent from 4.634 percent. Bond prices and yields move in opposite directions.
