* Caution before Friday's jobs report pulls market down
* Telecoms, consumer staples biggest drags
* Jobless benefits claims drop sharply in latest week
* Dow off 0.3 pct, S&P 500 off 0.6 pct, Nasdaq off 1 pct
* For up-to-the-minute market news click []
(Updates to close)
By Rachel Chang
NEW YORK, Aug 6 (Reuters) - U.S. stocks fell on Thursday
as investors turned cautious a day ahead of a crucial
government report on July employment, and took profits after
recent strong gains.
The stock market's second day of declines came on the
heels of a four-day rally that pushed U.S. indexes on Tuesday
to close at their highest levels since last fall.
"Obviously, everyone looks at the employment number as
potentially market moving, so there could be a little
trepidation ahead of that report," said Todd Salamone, vice
president of research at Schaeffer's Investment Research in
Cincinnati, Ohio.
Losses were broad-based, with the telecommunication
services and consumer staples sectors among the drags on the
S&P 500. An S&P index of consumer staples stocks <.GSPS> fell
0.9 percent, while an S&P index of telecom services shares
<.GSPL> lost 1.2 percent.
Proctor & Gamble Co <PG.N> shares fell for a second day
after posting an 11 percent drop in quarterly sales on
Wednesday. P&G's stock lost 4.5 percent to close at $51.46. It
was the top drag on the Dow.
Another Dow component, Cisco Systems Inc <CSCO.O>, the
world's largest network equipment manufacturer, also weighed
on sentiment as its Chief Executive John Chambers said that
it's too soon to call a recovery. For details, see
[]
After losing ground in morning trading, Cisco rose 0.6
percent to close at $22.308 on the Nasdaq.
Wall Street's attention is now on the government's
all-important non-farm payrolls report, which will show the
number of jobs lost in July. The data will be released before
the bell on Friday.
A Reuters survey forecasts that the Labor Department
report will show 320,000 workers lost their jobs in July, the
least for any month since September last year.
The Dow Jones industrial average <> declined 24.71
points, or 0.27 percent, to 9,256.26. The Standard & Poor's
500 Index <.SPX> fell 5.64 points, or 0.56 percent, to 997.08.
The Nasdaq Composite Index <> slid 19.89 points, or 1
percent, to 1,973.16.
Shares of low-cost wireless carrier MetroPCS <PCS.N>
plunged almost 30 percent to close at $8.99 after posting
disappointing quarterly results.
Despite the latest pullback, the broad S&P 500 is up 47.5
percent from its 12-year closing low in early March. The rally
has been driven by a string of economic data suggesting a
recovery, and an earnings season with most S&P 500 companies
beating expectations.
Before the opening bell, numbers from the Labor Department
showed initial jobless claims fell 38,000 to a seasonally
adjusted 550,000 for the week ended Aug. 1, down substantially
from the 588,000 the previous week. The latest weekly claims
were well below the forecast calling for 580,000. For details,
see []
Positive data also came from July retail sales, as some
U.S. retailers reported sales declines that were not as steep
as expected. Investors are looking for signs of life among
recession-weary consumers to help underpin a potential
economic recovery. []
The S&P retail index <.RLX> was up 1.1 percent.
Volume was below average on the New York Stock Exchange,
with 1.38 billion shares changing hands, under last year's
estimated daily average of 1.49 billion, while on the Nasdaq,
about 2.44 billion shares traded, above last year's daily
average of 2.28 billion.
Declining stocks outnumbered advancing ones on the NYSE by
a ratio of about 3 to 2, while on the Nasdaq, about nine
stocks fell for every four that rose.
(Reporting by Rachel Chang; Additional reporting by Leah
Schnurr; Editing by Jan Paschal)
