updated 6/4/2004 9:31:14 AM ET 2004-06-04T13:31:14

Stocks slid Thursday, as investors focused on the government’s upcoming employment report, shrugging off a widely expected decision by OPEC to raise its crude oil output. Uncertainty over Intel Corp.’s mid-quarter forecast pulled down tech shares.

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The promise of more oil and a bullish report on worker productivity failed to spark a rally as many investors remained wary of taking big stakes ahead of the Labor Department report due Friday.

“Basically, we’re just treading water before tomorrow’s employment data,” said Todd Clark, head of listed equity trading at Wells Fargo Securities. “There’s a concern that a creeping rise in energy prices could slow the economy down more, so this is the next data point the market is looking at for guidance.”

The Dow Jones industrial average fell 67.06 points, or 0.6 percent, to 10,195.91, while the broader Standard & Poor’s 500-stock index fell 8.35 points, or 0.7 percent, to 1,116.64. The Nasdaq composite index slumped 28.72 points, or 1.4 percent, to 1,960.26, largely on weakness in the semiconductor sector.

Wall Street remained anxious about the effect higher oil prices are having on the economy despite the decision by the Organization of Petroleum Exporting Countries to raise its production ceiling by 2 million barrels a day.

OPEC agreed to raise the target by an additional 500,000 barrels a day in August if necessary, oil ministers said after meeting in Lebanon on Thursday. But with several of OPEC’s 11 members already close to their output limits, some analysts are concerned the group may not be able to pump enough oil to dent prices significantly.

“The two major forces in the market today are OPEC and what they had to say, and Intel, and the fears of what they might say. Those are the bookends,” said Arthur Hogan, chief market analyst at Jefferies & Co.

The news from OPEC was viewed as benign to relatively good, producing a muted reaction in the oil markets, but the other bookend was causing some concern, Hogan said.

The report from chip bellwether Intel, due after the session, followed several lackluster updates from other semiconductor makers. Intel lost 60 cents to $27.41 on speculation that it might offer a forecast at the lower end of expectations.

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With so much uncertainty, there was little reaction to a better-than-expected report from the Labor Department on the productivity of America’s workers during the first three months of the year. Labor costs also moved up, a worrisome factor that could pressure profit margins if it becomes a trend.

The May jobs numbers due Friday had broader implications. If the number of new jobs generated during May is dramatically higher than the 225,000 the market expects, investors fear it could prompt the Federal Reserve to raise interest rates sooner, and more sharply than it might otherwise.

If the number comes in much lower, it could delay a rate hike but be viewed as a worrisome sign the economic recovery is stalling.

Reflecting continued concern about pending interest rate hikes, Bank of America adjusted its view of the insurance sector, downgrading its recommendation on Allstate Corp. and Hartford Financial Services Group Inc. to a “neutral” from a “buy.” Allstate shed 76 cents to $43.46; Hartford Financial lost 59 cents to $65.75.

Many of the nation’s retailers reported strong monthly sales in May — reassuring after consumers pulled back in April amid rising energy costs. Wal-Mart Stores Inc. gained 25 cents to $56.60 after announcing a 5.9 percent increase in May sales.

Sears, Roebuck and Co., however, reported a bigger than expected drop in sales. Its share price declined $1 to $37.13.

Declining issues outnumbered advancers by nearly 3 to 1 on the New York Stock Exchange. Volume was light. The Russell 2000 index, which tracks smaller company stocks, closed the day down 11.12 points, or 1.9 percent, at 562.44.

Overseas, Japan’s Nikkei stock average finished 1.9 percent lower. In Europe, France’s CAC-40 closed up 0.2 percent, Britain’s FTSE 100 added 0.3 percent and Germany’s DAX index was up 0.7 percent.

© 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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