NEW YORK (CNNMoney) -- U.S. stocks fell Thursday, as investors were rattled by worries of a global growth slowdown.
Both China and Germany reported soft manufacturing data, which caused jitters to pulse through the markets throughout the trading day.
Signs of a continued resurgence of employment in the United States couldn't help investors shake the funk. The number of Americans filing for unemployment claims hit a 4-year low.
The Dow Jones industrial average (INDU) shed 78 points, or 0.6%. The S&P 500 (SPX) lost 10 points, or 0.7%. The Nasdaq (COMP) dropped 12 points, or 0.4%.
Commodities also dropped sharply, as investors feared how a global slowdown might affect consumer and industrial demand.
Copper and oil fell about 2%. All 10 Dow sectors were down, with oil and gas producers, including Chevron (CVX, Fortune 500) and Exxon (XOM, Fortune 500), among the biggest decliners. Caterpillar (CAT, Fortune 500) and Alcoa (AA, Fortune 500) were also big drags on the blue chip index.
Still, traders say volumes have been abnormally low this week, indicating that investors don't have strong convictions about the direction of the market.
"We're in that deadzone between earnings right now," said Douglas DePietro, head of equity trading at Evercore, referring to the fact that quarterly corporate results are several weeks away. "The market is pretty listless this week."Stock market's next hurdle: Peak Earnings
Early Thursday, a reading on Chinese manufacturing compiled by HSBC showed the index hit a four-month low in March. The new reading came in at 48.1, down from 49.6 in February.
A reading below 50 indicates the sector is contracting, and HSBC said that a significant drop in new orders acted as the primary drag on manufacturing. Reflecting a broader slowdown, China lowered its growth target and hiked gasoline prices in recent weeks.
A reading on manufacturing activity in Germany showed the eurozone stalwart also hit a soft patch in March, as the sector registered only a marginal expansion.
U.S. stocks faltered Wednesday, after the latest report on existing home sales damped enthusiasm about the economy.
Overall, stocks have been supported this year by rising hopes for the U.S. economy and easing concerns about the debt crisis in Europe. But given the strength of the recent rally, analysts say a period of uneven trading is to be expected.
So far this year, the Dow is up 7%, the S&P 500 has gained 11% and the Nasdaq has surged 18%.
World markets: European stocks closed lower. Britain's FTSE 100 (UKX) shed 0.8%, the DAX (DAX) in Germany lost 1.3% and France's CAC 40 (CAC40) fell 1.6%.
Asian markets ended mixed. The Shanghai Composite (SHCOMP) slid 0.1%, while the Hang Seng (HSI) in Hong Kong ticked up 0.2% and Japan's Nikkei (N225) added 0.4%.Buyout season is back for private equity
Japan's Ministry of Finance reported the island nation enjoyed a trade surplus in February. A deficit had been expected, and the announcement buoyed stocks.
Economy: The government reported that first-time claims for unemployment benefits in the week ended March 17 dropped to 348,000, a four-year low and a better number than analysts had expected.
The Conference Board's Leading Economic Indicators index for February increased by 0.7%, more than the expected 0.6% uptick.
Companies: Dollar General (DG, Fortune 500) shares popped after the retailer reported earnings of 85 cents per share on $4.2 billion in revenue, topping projections. The company said same-store sales increased 6.5% over the quarter.
FedEx (FDX, Fortune 500) shares dropped, despite reporting better-than-expected earnings and sales, citing record holiday shipping. The company, seen as a proxy for the health of the broader economy, said it expects its 'solid performance' to continue.How to avoid the looming budget train wreck
ConAgra (CAG, Fortune 500) reported earnings of 51 cents per share on $3.4 billion in revenue, slightly better than analysts had expected. Shares fell.
Athletic apparel maker lululemon athletica (LULU) reported that revenue surged 51.4% to $371.5 million in the fourth quarter, topping analyst estimates.
McDonald's (MCD, Fortune 500) said Wednesday that CEO Jim Skinner plans to retire at the end of June, ending a seven-year turn at the helm of the fast-food restaurateur. The company's current president and COO, Don Thompson, will succeed Skinner.
After the bell, Nike (NKE, Fortune 500) reported earnings that beat analysts' estimates. Despite that, shares of the sneaker company dropped in after hours trading.
Currencies and commodities: The dollar strengthened against the euro and the British pound, but fell versus the Japanese yen.
Oil for May delivery slipped $1.92 to $105.35 a barrel.
Gold futures for April delivery fell $7.80 to $1,642.50 an ounce.
Bonds: The price on the benchmark 10-year U.S. Treasury rose, pushing the yield down to 2.275% from 2.29% late Wednesday.