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Market Recap: Stocks Down as Hope of More Easing Fades

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Markets closed down today:

Dow: -0.88 percent

Nasdaq: -0.66 percent

S&P: -0.81 percent

Precious metals:

Gold: up +0.84 percent to $1,668.52 an ounce

 Silver: up +2.35 percent to settle at $30.45

Commodities:

 Oil: -1.27 percent

Markets were down because:

Nobody ever said reading the Federal Reserve was easy.

On Wednesday, the Fed appeared to suggest it was closer to taking additional steps to help the U.S. economy. Stocks rallied as a result and finished the day well off their lows.

But the prospect of Fed help seemed much less certain Thursday, and stocks fell. The Dow Jones industrial average lost 115.30 points to close at 13,057.46 -- the biggest loss in more than a month and the Dow's fourth straight down day.

The government reported that claims for unemployment insurance rose last week, the second straight increase, which also hurt stocks. The Standard & Poor's 500 index fell 11.41 points to 1,402.08. The Nasdaq composite index fell 20.27 to 3,053.40.

Benchmark oil fell 99 cents to $96.27 per barrel in New York. Slower growth cuts demand for oil, so traders push the price down when they are nervous about the economy.

Manufacturing activity fell to a nine-month low in China, the world's second-largest economy after the United States. Some investors expect that the government there may have to step in more decisively to try to boost the economy.

Investors who yanked money out of stocks and oil put it in metals instead. The price of gold rose 2 percent, jumping $32.30 to $1,672.80 per ounce. Prices also rose for other metals. The euro hit a seven-week high against the dollar.

But overall, news was slow, typical for the market's traditional August lull.

The big events that could move the market lie ahead -- Fed Chairman Ben Bernanke's speech in Wyoming later this month and a German court's ruling next month on whether the country can participate in a bailout for European countries.

German leaders, on the eve of a critical meeting with their Greek counterparts to discuss Greece's ongoing bailout, showed signs of the strain between the two countries.

Greece has asked for more time to put in place the spending reforms that Germany is requiring, but the German finance minister said Thursday that more time wouldn't solve Greece's problems.

In U.S. stocks, Big Lots fared worst among S&P 500 companies. It fell nearly 21 percent, losing $8.08 to $30.76, after reporting a sharp drop in its quarterly profit and slashing its forecast for the rest of the year.

Hewlett-Packard lost $1.56, or more than 8 percent, to $17.64. The world's largest maker of printers and PCs reported weak quarterly results, took a huge charge to write down the value of a recent acquisition and offered a disappointing forecast.

Trading volume was light, just under 3 billion shares. The average this year is 3.8 billion.

The Associated Press contributed to this report.

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