A rising dollar and caution ahead of the government’s monthly employment report drove investors out of stocks early Thursday

Stocks fell as traders remain wary ahead of Friday’s report on December employment. Analysts are expecting that the unemployment rate rose. On Thursday, the government reported a slight rise in weekly claims for unemployment benefits, though the increase was less than expected. The Labor Department said initial claims rose by 1,000 to 434,000 last week.

Upbeat December retail sales reports and increased forecasts lifted some retailers. Shoppers spent a little more over the holiday season, though consumer spending is expected to be weak amid continuing high unemployment and tight credit.

Warehouse club operator Costco Wholesale Corp., The Buckle and Children’s Place Retail Stores Inc. all reported higher monthly sales.

Sears Holdings Corp., which operates Kmart and Sears, Roebuck and Co., eked out a small gain and offered fourth-quarter guidance that was sharply above Wall Street estimates. Others, including Macy’s Inc. and Limited Brands, raised their profit forecasts.

The reports come as investors hunt for more evidence of economic strength to sustain a 10-month bull run in the stock market. Trading in recent days has offered few clues about the direction of the markets in 2010 as investors hold back ahead of the jobs report. A stubbornly high unemployment rate remains one of the biggest drags on the economy, and investors are still waiting for hiring to rebound before concluding that a true recovery has taken hold.

In midmorning trading, the Dow Jones industrial average fell 24.34, or 0.2 percent, to 10,549.34. The broader Standard & Poor’s 500 index fell 2.46, or 0.2 percent, to 1,134.68, and the Nasdaq composite index fell 11.11, or 0.5 percent, to 2,289.98.

Bond prices were mixed. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.82 percent from 3.83 percent late Wednesday.

The dollar rose, and gold prices fell. A gain in the dollar weighs on commodity prices by making them more expensive for overseas buyers. That hurts energy and materials companies.

Crude oil fell 54 cents to $82.64 per barrel on the New York Mercantile Exchange.

Trading on the stock market has been subdued for much of this week after a big gain on Monday spurred by stronger global manufacturing data. The cautious tone comes as investors await the December employment report. Economists forecast the unemployment rate rose to 10.1 percent from 10 percent and that employers shed 8,000 jobs.

Two stocks fell for every one that rose on the New York Stock Exchange, where volume came to 208.3 million shares, compared with 191.5 million shares traded at the same point Wednesday.

The Russell 2000 index of smaller companies fell 4.42, or 0.7 percent, to 633.53.

Some overseas markets fell after China took steps to limit lending and prevent its economy from overheating. Traders fear the moves could affect economic growth around the world.

In afternoon trading, Britain’s FTSE 100 rose 0.1 percent, Germany’s DAX index fell 0.5 percent, and France’s CAC-40 lost 0.1 percent. Earlier, Japan’s Nikkei stock average fell 0.5 percent.

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