(By Balachander) U.S. stocks ended in red as concerns about the financial situation in Europe and surprise rise in domestic jobless claims dented sentiment.
S&P 500 Index fell 0.81 percent to close at 1,402.10. The Dow Jones Industrial Average dropped 0.88 percent to end at 13,057.46. The Nasdaq Composite Index shed 0.66 percent to finish at 3,053.40.
On the U.S. economic front, the number of Americans who continued to receive jobless benefits unexpectedly rose to a five-week high, a government data showed. Jobless claims increased 4,000 to 372,000 for the week ended August 18 from a revised 368,000, while economists projected 365,000 applications.
A report from the Commerce Department showed that new home sales were 372,000 in July, versus a revised 359,000 in June. Economists expected sales of 365,000 units.
Investors also kept a close watch on a meeting between German Chancellor Angela Merkel and French President Francois Hollande to address Europe's debt crisis. Greek Prime Minister Antonis Samaras is due to meet euro zone chief Jean Claude Juncker to seek more time for implementing austerity measures needed for the debt-laden country to receive bailout funds.
Separate reports showed contraction in eurozone private sector activity and China's manufacturing sector, raising worries about the global growth.
Federal Reserve Bank of St. Louis President James Bullard said on CNBC that minutes of the Federal Reserve's latest policy meeting were "a bit stale" because U.S. data has been somewhat better since then. Many central-bank officials favored another round of stimulus, the minutes showed.
Hot Stocks Of The Day:HPQ, BA, GGP, BIG, GES, PDCO, HAIN, IRF, FRED
In corporate news, Hewlett-Packard Co. (NYSE:HPQ) retreated 8.07 percent after the world's largest seller of personal computers posted a quarterly loss amid weaker-than-forecast revenue. HPQ also revised its full-year earnings forecast.
Boeing Co. (NYSE:BA) declined 3.35 percent after after Australia's Qantas Airways canceled 35 orders for 787-9 planes worth about $8.5 billion at current list prices.
General Growth Properties Inc. (NYSE:GGP) jumped as much as 12.7 percent after Pershing Square Capital Management LP, the hedge fund controlled by Bill Ackman, said the Chicago, Illinois-based second largest U.S. mall owner should consider selling itself to maximize shareholder value.
Big Lots Inc. (NYSE:BIG) sank 20.80 percent after the broadline closeout retailer lowered fiscal 2012 earnings guidance following a 38.1 percent drop in second-quarter earnings on higher expenses.
Guess? Inc. (NYSE:GES) tumbled 22.63 percent after the apparel company reduced fiscal 2013 outlook and guided third quarter below Wall Street view. It reported a 45.2 percent drop in quarterly earnings, trailing market expectations, due to lower store traffic.
Patterson Companies Inc. (NASDAQ:PDCO) dropped 4.90 percent after the supplier of dental and veterinary products reported lower quarterly earnings as gross margin contraction offset growth in sales.
Hain Celestial Group Inc. (NASDAQ:HAIN) jumped 19.08 percent after natural and organic food company posted a jump in quarterly earnings and issued an upbeat full-year forecast. The company also agreed to acquire Premier Foods Plc's (PFD) portfolio of packaged grocery brands to boost its presence in the U.K.
International Rectifier Corp. (NYSE:IRF) retreated 11.85 percent after the maker of power management semiconductors posted a fourth quarter loss and announced a restructuring plan. It also offered a downbeat revenue forecast for the first quarter.
Fred's Inc. (NASDAQ:FRED) lost 10.20 percent after the operator of retail discount stores and full-service pharmacies posted lower-than-expected quarterly earnings due to higher expenses.
European markets closed mixed, with Germany's DAX down 0.97 percent to close at 6,949.57. France's CAC40 retreated 0.84 percent to finish at 3,432.56. U.K.'s FTSE 100 inched up 0.04 percent to end at 5,776.60.
Among Asian markets, China's Shanghai Stock Exchange Composite Index inched up 0.25 percent to finish at 2,113.07. Japan's Nikkei 225 added 0.51 percent to end at 9,178.12. Hong Kong's Hang Seng Index advanced 1.23 percent to end at 20,132.24. India's BSE Sensex closed at 17,850.22, up 0.02 percent.
Commodity & Currency Scan:
Crude oil futures dropped 1.23 percent to $96.06 per barrel and natural gas futures dipped 0.07 percent to $2.824 per million metric British thermal units. Gold futures advanced 1.96 percent to $1,672.6 per ounce and silver futures gained 3.29 percent to $30.615 per ounce.
In the currency market, the euro advanced 0.26 percent against the U.S. dollar to 1.2561. The British pound dipped 0.13 percent against the greenback to 1.5859, and the dollar shed 0.17 percent against the Japanese yen to 78.4500.