Wall Street modestly lower in volatile session

NEW YORK: US stocks fell modestly in a volatile, abbreviated session on Wednesday as concerns over growth in China and European debt overshadowed strength in large-cap tech shares.

Major indexes swung between losses and breakeven in thin trading as many traders were already away before Thursday's Independence Day holiday. Markets will close early on Wednesday and reopen for a full session on Friday.

A pair of encouraging reports on the labor market boosted sentiment before Friday's payrolls report but failed overcome concerns about developments abroad.

Chinese shares dropped after data on China's services sector indicated slowing growth, while European shares fel in reaction to a political crisis in Portugal that sent the country's bond yields soaring.

"I thought we would see a much greater decline given the news from overseas, but the market is holding up pretty well," said Mark Grant, managing director at Southwest Securities in Fort Lauderdale, Florida. "It looks like people are squaring up ahead of the holiday.

Large-cap tech stocks were among the strongest of the day, helping to limit losses. Cisco Systems rose 1.3 percent to $110.94 while Oracle Corp rose 0.8 percent to $30.33.

The Dow Jones industrial average was down 16.82 points, or 0.11 percent, at 14,915.59. The Standard & Poor's 500 Index was down 5.67 points, or 0.35 percent, at 1,608.41. The Nasdaq Composite Index was down 2.52 points, or 0.07 percent, at 3,430.88.

The S&P 500 is almost 4 percent below its May 21 record closing high of 1,669.16, but has been unable to close above its 50-day moving average of 1,623.94 since June 20.

Cyclical shares, which are closely tied to the pace of economic growth, were among the biggest losers on Wednesday. Financial and material shares were among the weakest, though losses were limited in energy stocks after a spike in crude oil prices.

U.S. Steel Corp sank 5.5 percent to $18.20 while Alcoa Inc lost 1.8 percent to $7.66. Bank of America Corp fell 0.9 percent to $12.79 while Morgan Stanley was off 1.8 percent at $24.01.

Private employers added 188,000 jobs in June, far more than had been expected, a report showed. In addition, initial jobless claims fell by more than expected in the latest week. Both reports were encouraging going into Friday's jobs report.

The Institute for Supply Management's index for the services sector fell to 52.2 from 53.7 in June, below expectations.

"There's a lack of visibility in markets with all the global issues out there, and while the (labor market) data is positive, it also isn't the kind of strong rebound we'd love to see," said Wayne Kaufman, chief market analyst at Rockwell Securities in New York. "It is very difficult to project earnings in this environment, and that's why we've been unable to break above resistance."

Economic data has been a significant market mover in recent weeks as investors attempt to gauge when the U.S. Federal Reserve will begin reducing its bond-buying stimulus program, which has been credited with fueling the market's gains this year. Bullish data has led to market declines as traders worry a strong economy will mean a faster end to the policy.