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Stocks fall on Wall Street

Dec. 06, 2013 @ 12:00 AM

NEW YORK -- The outlook for hiring is improving and the economy is growing at its fastest pace in more than a year, so what's the bad news for the stock market?

Stocks fell Thursday after the government reported that the number of Americans applying for unemployment benefits dropped to the lowest in nearly six years last week. Also, the U.S. economy grew at a 3.6 percent annual rate from July through September, the fastest since early 2012.

Investors believe the encouraging signs on the economy will push the Federal Reserve closer to pulling back on its $85 billion-a-month bond-buying program.

That stimulus, which is intended to hold down interest rates, has been helping to power this year's record-setting run in the stock market.

The Standard & Poor's 500 index dropped for the fifth time in a row, matching its longest losing streak since September.

"If they do cut the bond purchases, the knee-jerk reaction for the market will be to move down," said Chris Gaffney, a senior market strategist at EverBank.

The S&P 500 index fell 7.78 points, or 0.4 percent, to 1,785.03. The Dow Jones industrial average fell 68.26 points, or 0.4 percent, to 15,821.51. The Nasdaq composite declined 4.84 points, or 0.1 percent, at 4,033.16.

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