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The Dow Jones Industrial Average lost 139.41 points (1.10 percent) to finish at 12,584.17.
The broader S&P 500 lost 12.22 (0.91 percent) at 1,335.10, while the tech-heavy Nasdaq Composite fell 13.51 points (0.48 percent) to 2,814.72.
Disappointing data on jobs cast a shadow over the market, one day before the government releases its much-awaited monthly unemployment report.
Early Thursday the Labor Department reported that initial jobless claims rose to 474,000 in the week ending April 30, a 10 percent increase from the prior week and an eight-month high.
Most analysts expected claims would fall, and the data raised fears that Friday's employment report would be dismal.