MARKET SNAPSHOT: Dow Industrials Back Off Run At 11,000

By Kate Gibson

NEW YORK (MarketWatch) -- U.S. stocks finished Thursday's session lower, as investors treaded cautiously at the outset of earnings season and a day ahead of a key September jobs report that might determine whether more monetary stimulus from the Federal Reserve is on the way.

"All eyes are on tomorrow's jobs report with investors looking for some improvement," said Michael Sheldon, chief market strategist at RDM Financial Group.

After rising to within a few points of the psychologically significant 11,000 level, the Dow Jones Industrial Average (DJI) ended off 19.07 points, or 0.2%, at 10,948.58. Shares of Alcoa (AA) fronted blue-chip losses, falling 1.4% ahead of the aluminum giant's earnings after the close.

The S&P 500 Index (SPX) fell fell 1.91 points, or 0.2%, to 1,158.06, with telecoms and materials falling the most among its 10 industry groups.

The tech-heavy Nasdaq Composite Index (RIXF), however, finished slightly higher, gaining 3.01 points, or 0.1%, to 2,383.67.

Decliners edged past advancers on the New York Stock Exchange, where volume totaled 916 million.

The dollar rebounded against the euro, which had pushed to a new eight-month high above $1.40 after European Central Bank President Jean-Claude Trichet's remarks were deemed not excessively bearish.

The dollar index (DXY), which contrasts the greenback with six currency rivals, stood at 77.458, up from its 77.397 level in late New York trade Wednesday.

Crude-oil futures fell $1.56 to finish at $81.67 a barrel on the New York Mercantile Exchange, while gold futures fell $12.70 to end at $1,335 an ounce.

The weekly jobless-claims data came a day before the release of the government's monthly employment report, with economists expecting the unemployment rate to climb to 9.7% in September from 9.6% in August.

Retailers including Abercrombie & Fitch Co. (ANF) and Limited Brands Inc. (LTD) reported better-than-anticipated monthly sales.

PepsiCo Inc. shares (PEP) fell 2.9% after the beverage company lowered its earnings forecast. .

"Overall market internals have been improving in recent weeks, and barring a major development it appears markets are likely to head higher into the fall," said RDM Financial's Sheldon.