US STOCKS-Wall St loses ground after services data

                                
   * Bank of America to repay TARP money
                                
 * ISM signals contraction
                                
 * Jobless claims fall
                                
 * November retail sales weaker than expected
                                
 * Indexes: Dow off 0.3 pct, S&P off 0.1 pct, Nasdaq up 0.2
                                
 By Chuck Mikolajczak
                                
 NEW YORK, Dec 3 (Reuters) - U.S. stocks lost ground on
Thursday after data showing the U.S. services sector shrank
unexpectedly in November offset Bank of America's plans to
repay $45 billion in taxpayer bailout funds.
                                
 The U.S. services sector index fell to 48.7 in November,
indicating contraction, from 50.6 in October, according to an
industry report. For details, see [ID:nN0394160]
                                
 Wall Street initially rose after Bank of America Corp
<BAC.N> made the surprising announcement on Wednesday in a what
is viewed as a victory for outgoing Chief Executive Kenneth
Lewis that could free the top U.S. lender from pay curbs as it
looks to hire a new CEO. [ID:nN0250856]. Bank of America shares
were up 1.6 percent to $15.90.
                                
 "We actually had a pretty good feeling going into this with
the Bank of America payback that had a lot of people almost
jovial," said Dan Cook, senior market analyst at IG Markets in
Chicago.
                                
 "The ISM services doesn't seem to get as much weight as the
manufacturing, but seeing it head in this direction is not a
positive sign."
                                
 The Dow Jones industrial average <.DJI> dropped 27.66
points, or 0.26 percent, to 10,425.02. The Standard & Poor's
500 Index <.SPX> fell 1.23 points, or 0.11 percent, to
1,108.01. The Nasdaq Composite Index <.IXIC> gained 4.35
points, or 0.20 percent, to 2,189.38.
                                
 The numbers of U.S. workers filing new claims for
unemployment fell last week, the government said, while other
data showed non-farm productivity was slightly less robust than
previously thought. [ID:nN0386811]
                                
 U.S. retailers posted much weaker-than-expected sales for
November in a slow kickoff to the key holiday shopping season.
[ID:nN0381393]
                                
 The Retail HOLDRs ETF <RTH.P> fell nearly 1 percent.
Abercrombie & Fitch Co <ANF.N> shed 6 percent to $37.53, while
Target Corp <TGT.N> fell 3.3 percent to $46.13.
                                
 Federal Reserve Chairman Ben Bernanke, making a case for a
second term, told Congress the Fed's forceful actions prevented
a devastating financial crisis from getting even worse.
[ID:nWEQ003631]
                                
 (Reporting by Chuck Mikolajczak; editing by Jeffrey
Benkoe)
                                
  ((Charles.mikolajczak@thomsonreuters.com; +1 646 223 5234;
Reuters
Messaging:rm://Charles.mikolajczak.reuters.com@reuters.net))
                                
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