NEW YORK -- U.S. stocks fell in early trading Thursday, promising another nerve-wracking day for investors who have just endured one of the worst losses of the year.
Stock index futures had climbed before the market opened after several big retailers, like Target and Limited Brands, reported healthy sales for May. But those gains disappeared after the government released data showing a rise in claims for unemployment benefits and a slower rate of economic growth.
The Dow Jones industrial average lost 46 points to 12,374 shortly after the market opened. It had plunged 161 points the day before on concerns about Europe, marking its third-worst daily loss of the year.
The Dow is set to record its first monthly loss since September. The month has also wiped out nearly 80 percent of the Dow's gains in the first quarter, when investors wagered that Europe's financial troubles were, if not exactly solved, at least becoming more manageable.
The Standard & Poor's 500 edged down eight to 1,305. The Nasdaq composite fell 22 points to 2,815.
The government reported that claims for unemployment benefits rose last week to a five-week high. The market was also crimped by a government report that the U.S. economy grew at an annual rate of 1.9 percent in the first three months of the year, slower than estimated earlier.
The yield on the benchmark 10-year U.S. Treasury note fell again, a day after reaching the lowest point in at least six decades. It hit 1.59 percent in the morning, down from 1.61 percent. That's a sign that nervous investors are fleeing the stock market because the U.S. government doesn't have to pay very much to persuade them to invest in its bonds.
Caterpillar was the weakest stock in the Dow, down more than 3 percent in early trading. The machinery company is heavily dependent on China, and economists are concerned that the country, which has done much to power global economic growth, is slowing down.
There was at least one encouraging sign in world markets. The yield on 10-year bonds for Spain fell to 6.4 percent after shooting as high as 6.7 percent on Wednesday.
That means investors are more confident in Spain's ability to pay its debt, because they aren't demanding as high an interest rate in return for investing in bonds issued by that country's government. Other countries like Greece and Portugal had to seek bailout loans after their borrowing costs rose above 7 percent, a level that many economists see as too high for a country to continue funding itself.
Problems in Spain, which announced Friday that it would have to spend nearly $24 billion to bail out a troubled bank, Bankia, have rattled the world markets. On Thursday the European Union demanded that Spain provide more details about how it plans to finance an overhaul of its banking sector.