(AP) -- Stocks gave back some of their recent gains Wednesday as a batch of discouraging economic data prompted investors to take a pause a day after the market's record-setting climb.
The S&P 500 dropped 0.2% a day after setting an all-time high. The Dow Jones Industrial Average slipped below 30,000, a day after crossing that milestone for the first time. Industrial, energy and health care companies accounted for much of the decline. Technology companies rose, driving the Nasdaq composite to a record high.
The selling followed reports showing the number of Americans seeking unemployment aid jumped last week to the highest level in more than a month. A separate report showed consumer spending posted the weakest gain since April.
Despite the pullback, Wall Street closed up shop for the Thanksgiving holiday with the benchmark S&P 500 is still up 11% this month.
"The market overall has reached by most standards what we call overbought conditions, and that typically suggests that the market would need to digest the gains, perhaps pause a bit, and consolidate," said Quincy Krosby, chief market strategist at Prudential Financial.
The S&P 500 fell 5.76 points to 3,629.65. The Dow gave up 173.77 points, or 0.6%, to 29,872.47. The tech-heavy Nasdaq gained 57.62 points, or 0.5%, to 12,094.40. The index, which is on a three-day winning streak, last hit an all-time high on Sept. 2. The Russell 2000 index of smaller companies fell 8.51 points, or 0.5%, to 1,845.02.
Stocks have been pushing higher this month as investors have grown more hopeful that the development of coronavirus vaccines and treatments will help pave the way for the economy to recover next year.
This week, traders have also been encouraged by signs that the transition of power in the U.S. to President-elect Joe Biden has begun. Wall Street is also welcoming Biden's selection of former Fed chair Janet Yellen as treasury secretary.
Encouraging study results this month from drugmakers working on coronavirus vaccines and treatments have tempered lingering concerns over rising virus cases in the U.S., as well as in Asia and other parts of the world, and new government restrictions on businesses aimed at limiting the spread.
"The general themes are still intact, the hope for a vaccine that will herald a return to normalcy at some point in 2021," said Greg McBride, chief financial analyst at Bankrate.com.
Still, signs that the pandemic continues to weigh on the economy remain in the forefront. On Wednesday, the government said the number of Americans applying for unemployment benefits rose last week to 778,000, the highest level in five weeks.
Other data painted a similarly discouraging economic picture. The Commerce Department said U.S. consumer spending, the primary driver of the economy, rose by a sluggish 0.5% in October, the weakest gain since April when the pandemic first erupted. At the same time, the government said that income, which provides the fuel for consumer spending, fell 0.7% in October.
Though financial markets continue making gains, hardship from the economic slump is still growing, McBride said, and both small businesses and consumers are "sorely in need" of additional financial stimulus.
The downbeat economic reports spurred the rally in technology stocks, which traders have consistently bet on this year. Big Tech names like Apple, Microsoft and Amazon have been favored because the companies tend to have strong balance sheets and are expected to continue doing well once the pandemic subsides.
"This is a recurring theme in the market whenever there's a concern about growth expectations," Krosby said.
Treasury yields were mixed after mostly moving lower in the early going, a sign of caution in the market. The yield on the benchmark 10-year Treasury rose to 0.88% from 0.87% late Tuesday.
Gap led the way lower in the S&P 500, falling 19.6%, after the clothing retailer's third-quarter results fell short of Wall Street's forecasts.
Nordstrom jumped 11.6% after the department store chain's earnings improved in the third quarter, even as sales missed analysts' forecasts.
Traders bid HP shares 2.3% higher after the company delivered a solid quarterly report card.
U.S. markets will be closed Thursday for the Thanksgiving holiday. They will be open for half the day on Friday, closing at 1 p.m. Eastern.