Wall Street falls, tests support ahead of Bernanke speech

NEW YORK (Reuters) - Stocks fell on Thursday, following several sessions of muted trading, as investors closed out positions and looked ahead to Federal Reserve Chairman Ben Bernanke's speech to central bankers Friday for fresh trading incentives.

Bernanke is due to speak at a symposium of central bankers in Jackson Hole, Wyoming, where he is expected to stoke expectations for a third round of quantitative easing, though he may not detail the timing of the Fed's action.

All 10 S&P sectors were lower, with energy <.gspe> off 1.1 percent as the worst performing S&P sector. The index was once again testing the 1,400 mark, which has acted as a support level recently.

Over the past three weeks, the index has traded in a tight range between 1,400 and the April 2 high of 1,422.38, which has acted as a resistance point. The index has appreciated nearly 7 percent since the end of May.

"The market is somewhat extended but you could blow in the wrong direction and something is going to happen," said Stephen Massocca, managing director of Wedbush Morgan in San Francisco.

"It's hard to draw a lot of conclusions given how thin the markets are," he said.

Indeed, volume was anemic, with a combined 1.96 billion shares traded near the midpoint of the session on the New York Stock Exchange, NYSE Amex and Nasdaq, well below the average pace for this time in the session.

The daily trading volume, which has been at 2012 lows this week in a reflection of investors' reluctance to place big bets before Bernanke's speech, could weigh on profits at exchanges and brokers.

Fueling further caution among investors was the impending European Central Bank meeting on September 6 and a host of economic data scheduled for next week, including the Labor Department's payrolls report for August.

The S&P had barely budged over the prior three sessions - resulting in a decline of merely 0.05 percent - and hasn't closed with a 1 percent move in either direction since August 3.

The Dow Jones industrial average <.dji> dropped 99.96 points, or 0.76 percent, to 13,007.52. The Standard & Poor's 500 Index <.spx> lost 10.34 points, or 0.73 percent, to 1,400.15. The Nasdaq Composite Index <.ixic> fell 27.77 points, or 0.90 percent, to 3,053.42.

Nearly all retailers posted better-than-expected sales gains in August at stores open at least a year as parents and students wrapped up back-to-school purchases, setting the stage for a strong third quarter. Even with the surprising sales numbers, the Morgan Stanley retail index <.mvr> dipped 0.4 percent as it was weighed down by a drop in Sears Holdings Corp .

S&P Dow Jones Indices LLC said it will replace Sears with chemical maker LyondellBasell Industries NV in the S&P 500 after the close of trading on September 4. Sears dropped 7.4 percent to $53.18 while LyondellBasell gained 4.1 percent to $48.82.

Economic data showed consumer spending enjoyed its biggest rise in five months while the number of Americans filing new claims for jobless benefits held steady last week.

Pandora Media Inc

surged 18.9 percent to $11.99 a day after reporting adjusted second-quarter earnings that beat expectations and raising its full-year outlook.

(Editing by Bernadette Baum)

Source: http://news.yahoo.com/stock-index-futures-point-lower-open-075923342--finance.html

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