Data showed earlier that manufacturing activity in the Chicago area slowed significantly more-than-expected in May, falling to the lowest level since September 2009.
The report came after official data showed that first quarter gross domestic product was revised to 1.9%, in line with expectations, from an initial estimate of 2.2%.
In addition, the Department of Labor said the number of people who filed for unemployment assistance in the U.S. last week rose to 383,000, defying expectations for a decline to 370,000, while a separate report showed that the U.S. private sector added 133,000 jobs in May, missing expectations for an increase of 148,000.
Sentiment was also vulnerable as ongoing worries over the situation in Spain, where mounting borrowing costs and the lack of a convincing plan to recapitalize stricken lender Bankia fuelled fears that Madrid will be forced to seek an international bailout.
Morgan Stanley saw shares rise 0.31% after Chairman and Chief Executive James Gorman defended his bank’s performance as lead underwriter on Facebook’s IPO, despite waves of criticism from investors and a potential legal review of the deal’s marketing.
The investment bank also said it plans to buy 14% more of Smith Barney from Citigroup and will begin a 90-day process determine the fair market value of the additional stake. Citigroup shares were up 0.54% after the news.
As for Facebook, shares gained 0.71%, but the stock still remained close to USD28, well below its IPO valuation price of USD38.
Elsewhere, Talbots skyrocketed 95.74% after private equity firm Sycamore Partners said it will acquire the women's clothing chain in a deal worth about USD193 million in cash.
Retailer giant Costco edged up only 0.02% after posting a 4% rise in comparable sales in May, falling short of analysts' forecasts as a strong dollar hurt the value of its sales overseas. Rivals Target and TJX were up 0.36% and 0.94% respectively.
On the downside, TiVo shares plunged 2.68% after reporting a bigger-than-expected quarterly loss and forecast another loss for the current quarter as the maker of digital television recorders fights costly legal battles to protect its patents.
Mining equipment maker Joy Global also tumbled 7.77% after saying it expects order rates to moderate and sales to remain unchanged over the next few quarters.
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