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Weak economic news, Europe help stocks close lower

Stocks fell on Thursday, with the S&P 500 posting a fifth straight day of declines as already nervous investors were greeted by a round of weak domestic economic data while the euro zone remained turbulent.

The Dow Jones industrial average dropped 156.44  points, or 1.24 percent, to 12,442.11. The Standard & Poor's 500 Index lost 19.90 points, or 1.50 percent, to 1,304.90. The Nasdaq Composite Index fell 60.35 points, or 2.10 percent, to 2,813.69.

A gauge of future U.S. economic activity fell in April for the first time in seven months and the Philadelphia Fed business conditions index hit its lowest since September.

In addition, the weekly claims for jobless benefits remained at levels which indicated the pace of hiring remains lackluster, increasing worries about the health of the domestic recovery.

Spain's El Mundo newspaper reported that customers at troubled Spanish lender Bankia had withdrawn more than 1 billion euros over the past week, though the Spanish government denied the report.

Adding to concerns about the regions financial stability, Spain's borrowing costs shot up at a bond auction. Bankia shares fell 14 percent in European trading after sliding as much as 30 percent earlier.

News that some Greek banks face emergency funding needs hurt sentiment and caused a further decline in risk assets which have already dropped over the past weeks. The CBOE volatility index rose 3 percent and hit its highest level since early January.

"There is not a lot of interest in the equity market," said Jason Weisberg, managing director at Seaport Securities Corp in New York. "The overhang with Europe is so heavy, people are tired of playing whack-a-mole, and their portfolios are the mole."