Market Summary

Wall Street fell on Thursday, with a very lackluster performance following gains in 8 of the previous 9 sessions; despite the gains in Europe and Asia. A day after closing at fresh 2009 highs, the Dow Jones industrial average declined 7.79, or 0.1 %, to 9,783.92. The S&P 500 index lost 3.27, or 0.3 %, to 1,065.49, and the Nasdaq composite index fell 6.40, or 0.3 %, to 2,126.75. The Russell 2000 index of smaller companies fell 1.91, or 0.3 %, to 615.47.

As stocks fell moderately, bond prices soared, with the yield on the benchmark 10-year Treasury note falling to 3.39 % from 3.48 %,

Jobless Claims Fall

According to the Labor Department, initial claims for unemployment benefits dropped last week to a seasonally adjusted 545,000 from 557,000 the previous week. The decline was the third in the past four weeks, while the four-week average moving average dropped to 563,000.

Signs of a jobless recovery can be seen in the continuing claims figure. The number of people claiming jobless benefits for more than a week rose by 129,000 to a seasonally adjusted 6.2 million.

On the Corporate Front

Smartphone maker Palm, Inc. (PALM) handily beat the street despite a $68 million drop in revenue from $366.9 million. Analysts were only looking for a figure slightly under $300 million. In its quarterly result, PALM posted a loss of $13.6 million, or 10 cents per share, compared to a loss of 24 cents per share analysts had forecasted.

With the successful release of the Palm Pre earlier in the quarter, the company raised its full year adjusted revenue forecast to $1.6 billion – $1.8 billion; above analysts’ current average estimate of $1.57 billion.

SEC Votes on Flash Trades

The Securities and Exchange Commission proposed banning flash orders, which give certain large traders sneak peeks at market activity, responding to concerns that some investors are getting an unfair advantage.

In a flash order, a firm wishing to buy or sell stock can elect to freeze the order on an exchange for as long as half a second. Critics say this gives a select group of high-speed traders a window into the direction of the market and lets them make lightning-quick trades to profit.

SEC Chairman Mary Schapiro said flash orders may result in a “two-tiered market” and noted “the interests of long-term investors should be upheld as against those of professional short-term traders when those interests are in conflict.”

The flash proposal, approved 5-0, is the first of several rules the SEC is studying to change the structure of stock markets. This fall, the SEC is expected to tackle dark pools, which are private electronic networks that match orders anonymously.

The SEC also passed rules aimed at reducing conflicts of interest at credit-ratings firms, which have been blamed for contributing to the financial crisis by giving mortgage-backed securities and other products rosier ratings than warranted. The agency also voted to eliminate credit ratings from certain SEC rules, hoping to foster more due diligence by investors and less reliance on ratings.