(By Balachander) U.S. stocks retreated ahead of a key government employment report due Friday even as a weak reading on nonmanufacturing economic activity dented sentiment.
S&P 500 Index dropped 0.77 percent to finish at 1,391.57. The Dow Jones Industrial Average lost 0.47 percent to end at 13,206.59. The Nasdaq Composite Index closed at 3,024.30, down 1.16 percent.
U.S. non-manufacturing sector grew at a slowed pace than expected in April, a data showed. The Institute for Supply Management said non-manufacturing index declined to 53.5 last month from 56 in March amid fall in both new orders and employment, while economists expected a drop to 55.5.
Meanwhile, investors shrugged off an upbeat jobs report that showed the number of Americans who continued to receive jobless benefits fell more than forecast, the biggest weekly drop since early May last year. Jobless claims fell 27,000 to 365,000 last week from a revised 392,000, while economists projected claims to drop to 380,000.
Retailers have reported mixed comparable store sales numbers for the month of April as higher gasoline prices, an earlier Easter holiday, mild winter weather, and high unemployment dampened consumer sentiment.
Hot Stocks Of The Day: GM, GMCR, HNT, TDC, PRU, WFM
In corporate news, General Motors Co. (NYSE:GM) lost 2.1 percent to $22.43, following its quarterly results and forecast. The auto giant posted a 68 percent drop in first quarter earnings hit by losses at its European operations and impairment charges. GM expects North America results for the second and third quarters to be comparable to the first quarter due to the scheduled downtime at factories that produce full-size trucks.
Green Mountain Coffee Roasters Inc. (NASDAQ:GMCR) plunged as much as 53 percent and created a new 52-week low, after its third quarter, and full-year outlook fell short of market expectations. The company cut its 2012 earnings outlook to $2.40 to $2.50 per share from $2.55 to $2.65 per share. For the third quarter, Green Mountain sees adjusted earnings of 48 cents to 53 cents per share, on net sales between $861 million and $897 million.
Teradata Corp. (NYSE:TDC) jumped 6.90 percent after the company's first quarter results came in above Street's expectations. Further, the company lifted its fiscal 2012 guidance. Adjusted EPS jumped 25 percent to 60 cents from 48 cents in the same period last year, beating market expectations of 56 cents.
Total revenue jumped 21 percent to $613 million, versus expectations of 16 percent growth to $587.5 million.
Prudential Financial (NYSE:PRU) dropped 10.0 percent after the company's first quarter operating earnings came in below estimates.
Health Net Inc. (HNT) slumped 29 percent to $25.91 after the insurer cut its earnings forecast.
Whole Foods Market Inc. (NASDAQ:WFM) jumped 7.5 percent following its earnings report and guidance. The company raised its 2012 EPS forecast to between $2.44 and $2.47 from prior expectations of $2.28 to $2.32.
The European markets ended mixed. Germany's DAX dropped 0.24 percent to finish at 6,694.44. France's CAC40 inched 0.09 percent lower to close at 3,223.36. Britain's FTSE 100 added 0.15 percent to end at 5,766.55.
Among the Asian markets, China's Shanghai edged 0.07 percent higher to end at 2,440.05. Hong Kong's Hang Seng lost 0.28 percent to close at 21,249.53. India's BSE Sensex finished at 17,151.19, down 0.87 percent. The Japanese market was closed for the Constitution Memorial Day.
Commodity & Currency Scan:
Crude oil futures slumped 2.56 percent to $102.53 per barrel, while natural gas futures gained 3.73 percent to $2.337 per million metric British thermal units. Gold futures dropped 1.06 percent to $1,636.5 per ounce, and silver lost 1.71 percent to $30.120 per ounce.
In the currency market, the euro dipped 0.05 percent against the U.S. dollar to $1.3151. The British pound dropped 0.11 percent against the greenback to 1.6182, while the dollar added 0.05 percent against the Japanese yen to 80.1800.