Dawn Chorus: US stocks erase early gains on economic worries

US stocks fell on Thursday as persisting economic concerns ahead of an expected downward revision in the US GDP and speech by Fed chairman Ben Bernanke overshadowed figures showing initial jobless claims had declined more than expected.

The Dow Jones Industrial Average lost 0.7% to close at 9,986, breaking through the psychologically significant 10,000 level. The S&P 500 closed down 0.8% to 1,047 and the Nasdaq Composite closed 1.1% lower at 2,119.

Shares initially gained on data showing first-time claims for jobless benefits declined more than expected last week. But investors remained worried about a persistently high unemployment rate of 9.5% and a general reluctance of employers to hire.

Stocks erased gains led by major technology firms as markets turned cautious ahead of the release of the revised US second quarter GDP figure and Bernanke’s speech in front of the world’s central bankers in Jackson Hole, Wyoming, on Friday.

Cisco Systems fell 2.4%, while Intel gave up 1.6%.

European stocks rallied in response to rising profits from Crédit Agricole SA to L’Oreal SA and a better-than-estimated report on the US jobs.

The Stoxx Europe 600 Index gained 0.9% to 250. The UK’s FTSE 100 rose 0.9% and France’s CAC advanced 0.7%. Germany’s DAX gained 0.2%.

Asian stock markets ended mostly up with Chinese coal mining companies rising on hopes of industry consolidation.

Japan's Nikkei Stock Average rose 0.7%, China's Shanghai Composite gained 0.3%, Hong Kong's Hang Seng Index fell 0.1%, Australia's S&P/ASX 200 moved 0.8% up and South Korea's Kospi slipped 0.3%.