Stocks finished lower on Thursday, extending losses into a third session, as investors considered the timing of any reductions in the Federal Reserve's monetary stimulus in the face of mixed economic data.
After Wednesday's 129.59-point drop, the Dow Jones Industrial Average fell another 104 points, with Coca-Cola leading blue-chip losses.
Consumer staples and health care were hardest-hit and energy and utilities performed the best among the 10 major sectors on the S&P 500, which wavered mostly lower and closed down 6 points.
The Nasdaq erased gains late in the session to finish 5 points in the red.
"The market has been sideways now for the last month or so as investors are digesting what the Fed may do with their quantitative easing program. We won't know until it occurs whether it's priced in or not," said Paul Nolte, managing director at Dearborn Partners in Chicago.
Investors are focusing on the timing of a reduction in the U.S. Federal Reserve's stimulus program and will be looking ahead to the Federal Open Market Committee's (FOMC) last policy meeting of the year, next Tuesday and Wednesday.
The Fed's $85 billion monthly bond purchases have buoyed markets in recent months, but investors fear the Fed will slow down that stimulus as the U.S. economy improves.
On Thursday, the economy threw out conflicting signals when the government reported that retail sales rose solidly in November, but the ever-volatile jobless claims rose sharply last week.
The Commerce Department said retail sales increased 0.7 percent last month after rising by a revised 0.6 percent in October. November's retail sales increase was the largest in five months.
Economists polled by Reuters had forecast retail sales, which account for about 30 percent of consumer spending, advancing 0.6 percent after a previously reported 0.4 percent gain in October.
But initial claims for state unemployment benefits surged 68,000 last week to a seasonally adjusted 368,000, the Labor Department said. That was the largest weekly increase since November 2012. Claims for the prior week were revised to show 2,000 more applications received than previously reported.
Economists polled by Reuters had expected first-time applications to rise to 320,000 last week.
The four-week moving average for new claims, which irons out week-to-week volatility, rose 6,000 to 328,750.
Lululemon Athletica's shares dropped 11 percent after the Canadian yoga-wear chain reported third-quarter earnings that topped estimates, but projected flat same-store sales in the fourth quarter.
Facebook shares rose nearly 5 percent after S&P Dow Jones Indices said the social-networking company would join the Standard & Poor's 500 Index next week.
Hilton Worldwide Holdings rose 7.5 percent in making its return to the public market. The hotelier, which was taken private in 2007, priced its initial public offering at $20 a share on Wednesday and the shares closed on Thursday at $21.50.