Labor, Deficit News Send Stocks Lower

NEW YORK, March 9 -- Wall Street surrendered early gains and closed lower Thursday as a higher U.S. trade deficit and questions about the labor market squelched enthusiasm over a policy change at the Bank of Japan.

The Dow Jones industrial average fell 33.46, or 0.3 percent, to 10,972.28.

The Standard & Poor's 500-stock index lost 6.24, or 0.49 percent, to 1272.23, and the Nasdaq composite index dropped 17.74, or 0.78 percent, to 2249.72.

The market was cheered after the Japanese central bank signaled an end to its current interest rate policy, set in place five years ago to fight deflation and lift a sagging economy. The new policy, focused less on prices and more on Japan's growing economic strength, encouraged U.S. investors worried about the Federal Reserve's stance on interest rates and inflation.

However, the session's gains slipped away by early afternoon as investors focused on increasing unemployment claims and awaited the Labor Department's monthly job creation report, due Friday. A new record for the nation's trade gap also darkened investors' mood.

In the bond market, prices moderated as the yields on long-term Treasuries began to outpace shorter-term notes. The yield on the 10-year Treasury note fell to 4.72 percent.

Movers

General Motors added 92 cents, to $21.34, as the Wall Street Journal reported that GM and auto parts maker Delphi are close to a cost-cutting labor agreement. The report was strongly disputed by the union.

Google fell $10.88, to $343. It said it will pay up to $90 million to settle a lawsuit that claimed the company overcharged advertising customers for Internet sales referrals.

NYSE Group dropped $3.90, to $76.10, in its second day of trading.

Blockbuster fell 25 cents, to $3.62. Fourth-quarter profit rose as the company cut costs, but revenue fell 11 percent for the year.

Sun Microsystems gained 16 cents, to $4.51. The network computing company was upgraded to "overweight" by Lehman Brothers.

Indexes

New York Stock Exchange composite index fell 18.26, to 8007.83.

American Stock Exchange index rose 12.75, to 1869.69.

Russell 2000 index of smaller-company stocks fell 3.56, to 718.28.

Volume

NYSE: 2.19 billion shares, down from 2.53 billion on Wednesday. Decliners outnumbered advancers 6 to 5.

Nasdaq: 1.98 billion shares, down from 2.14 billion. Decliners outnumbered advancers 3 to 2.

Commodities

Crude oil for April delivery: $60.47, up 45 cents.

Gold for current delivery: $545.50 a troy ounce, up from $542.50 on Wednesday.