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U.S. stocks edge lower in midday trading

Traders work on the floor of the New

Traders work on the floor of the New York Stock Exchange on June 18, 2014 on Wall Street. The Dow was up 98 points at the end of the trading day after a positive but cautious outlook for the American economy after the Federal Reserve wrapped up another meeting June 18. Credit: Getty Images / Spencer Platt

Major stock indexes drifted lower in midday trading Thursday, retreating slightly from the market's latest record high close the day before. Coach and Rite Aid were among the biggest decliners on a day when investors weighed reports suggesting that the U.S. economy is gaining strength and a separate report that applications for unemployment benefits fell last week.

KEEPING SCORE: The Standard & Poor's 500 index fell one point, or 0.1 percent, to 1,955 as of 12:04 p.m. on Wall Street. The Dow Jones industrial average shed 28 points, or 0.2 percent, to 16,878. The Nasdaq composite slid 10 points, or 0.2 percent, to 4,352.

RECORD TERRITORY: The S&P 500 index hit a record high close Wednesday, it's second in less than two weeks. The index is up 5.8 percent this year. The latest rally came after the Federal Reserve said it sees improvement in the U.S. job market and signs of modest inflation. The Fed said it intends to keep short-term interest rates low.

JOBLESS AID: Fewer Americans sought unemployment benefits last week, evidence of a stronger job market as fewer workers lose their jobs. The Labor Department said Thursday that weekly applications for unemployment fell to a seasonally adjusted 312,000, the lowest in more than six years.

ECONOMIC BAROMETER: The Conference Board said Thursday that its index of leading indicators increased 0.5 percent last month, an improvement from a revised 0.3 percent gain in April. The latest reading provides further evidence that the U.S. economy is gaining strength after a harsh winter.

THE QUOTE: Applications for unemployment aid last week came in lower than expected, but were still above 300,000, signaling the recovery remains sluggish, said Chris Gaffney, a senior market strategist at EverBank Wealth Management.

"The U.S. economy is definitely still recovering, not at the pace that anyone would like, and the labor market is recovering, but slower than everyone would like," Gaffney said. "So it's still kind of a slow, boring market right now."

SECTOR WATCH: Five of the 10 sectors in the S&P 500 index fell, led by financial stocks. Utilities rose the most. The sector is up 14.7 percent this year as investors have piled into stocks that offer higher yields.

BIG DIPPER: Coach led the decline among S&P 500 stocks. The luxury goods maker dropped $3.67, or 9.4 percent, to $35.52.

DRUGSTORE WOES: Rite Aid reported its fiscal first-quarter earnings sank 55 percent due to higher-than-expected drug costs and other expenses. The stock fell 25 cents, or 3.4 percent, to $7.19.

SUPER MARKETS: Kroger jumped 5.6 percent after the nation's biggest supermarket chain reported higher profit and raised its earnings forecast for the year. Kroger rose $2.63 to $49.90.

OUSTED: American Apparel jumped 7.8 percent on news that the clothing chain's board ousted founder Dov Charney as chairman and moved to fire him as CEO, citing an "ongoing investigation into alleged misconduct." The stock rose 5 cents to 69 cents.

OVERSEAS: World stocks rallied, getting a lift from Wednesday's Federal Reserve update. Germany's DAX rose 0.7 percent while France's CAC-40 gained 0.7 percent. The FTSE 100 index of leading British shares added 0.2 percent. Japan's Nikkei 225 jumped 1.6 percent to end at 15,361.16. Hong Kong's Hang Seng was little changed while South Korea's Kospi edged up 0.1 percent.

BOND MONITOR: The yield on the 10-year Treasury note held at 2.59 percent.

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