US STOCKS-Market slips after gaining for 7 days, miners lead decline

Thu Sep 12, 2013 3:27pm EDT

* Precious metal prices fall on worries Fed may scale back stimulus

* Jobless claims fall more than expected, but data skewed

* Poll shows key economists expect Fed to taper next week

* Indexes off: Dow 0.1 pct, S&P 0.3 pct, Nasdaq 0.1 pct

By Caroline Valetkevitch

NEW YORK, Sept 12 (Reuters) - U.S. stocks edged lower on Thursday, on track to snap seven straight days of gains by the S&P 500 index, as a drop in precious metal prices dragged mining shares lower.

Spot gold fell 2.6 percent to $1,324 an ounce on worries the Federal Reserve will begin to scale back its monetary stimulus when it meets on Tuesday and Wednesday. Spot silver fell 5 percent to $21.99 an ounce.

Among U.S. economic data, first-time weekly claims for state unemployment benefits, the last major reading on the labor market before the Fed's meeting, fell to the lowest level since 2006, but the picture was confused because two states did not process all their claims.

The materials sector fell more than 1 percent, with gold miner Newmont Mining off 3.5 percent at $28.44.

The S&P 500 has risen about 3.4 percent over the prior seven sessions, its longest winning streak in two months, as concerns about a Western military strike against Syria have faded.

"Overall the market continues to face a number of potential issues over the next 30 days or so, but the majority of investors don't want to miss out on further upside and are not heading for the exit just yet," said Michael Sheldon, chief market strategist at RDM Financial in Westport, Connecticut.

Some of the immediate focus has shifted to next week's Fed meeting and a news conference. when a decision is expected about whether to change its $85 billion-a-month purchases of Treasury and mortgage bonds to bolster the economy.

Economists at a majority of U.S. primary dealers expect the Fed to announce it will cut its bond purchases, according to a recent Reuters poll.

But such a move would also indicate the Fed sees the economy in better shape than many think.

The Dow Jones industrial average was down 18.68 points, or 0.12 percent, at 15,307.92. The Standard & Poor's 500 Index was down 4.58 points, or 0.27 percent, at 1,684.55. The Nasdaq Composite Index was down 4.86 points, or 0.13 percent, at 3,720.15.

Investors continue to monitor developments in Syria. U.S. Secretary of State John Kerry and Russian Foreign Minister Sergei Lavrov discussed a Russian plan under which Damascus would give up its arsenal of poison gas and avert a U.S. military strike.

ANOTHER INDEX SHUFFLE

A day after announcing its largest change to the Dow Jones industrials in nearly a decade, S&P Dow Jones Indices announced late Wednesday that Vertex Pharmaceuticals Inc and Ametek Inc will replace Advanced Micro Devices Inc and SAIC Inc in the S&P 500 after the close of trading on Sept. 20.

Vertex shares gained 2.1 percent to $81.50 and Ametek rose 2.6 percent to $45.57. AMD fell 1.8 percent to $3.75 and SAIC edged up 1.7 percent to $15.02. Shares of Advanced Micro Devices were down 1.6 percent at $3.76.

Lululemon Athletica Inc slumped 4.7 percent to $65.74 after the apparel retailer reported second-quarter results and trimmed its outlook.

NetSol Technologies Inc jumped 10.1 percent to $11.23 after the software maker reported fourth-quarter earnings.

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