U.S. stocks erase gains ahead of nonfarm payroll report

U.S. stocks reversed earlier gains to turn lower on Thursday, as investors grew cautious before the release of the country's nonfarm payroll report for August on Friday.

The Dow Jones Industrial Average lost 8.70 points, or 0.05 percent, to 17,069.58. The S&P 500 fell 3.07 points, or 0.15 percent, to 1,997.65. The Nasdaq Composite Index shed 10.28 points, or 0.22 percent, to 4,562.29.

The market initially moved higher, propelling both the Dow and the S&P 500 to all-time intraday highs -- 17,161.55 points and 2011.17 points respectively -- as the European Central Bank (ECB)' s latest move to cut interest rates provided a boost to the market.

The interest rates on the main refinancing operations will be decreased to 0.05 percent and the deposit facility of the Eurosystem was to minus 0.2 percent, said the ECB in an announcement.

European shares rallied across the board Thursday on the ECB's stimulus measures and the U.S. stock market followed suit.

However, Wall Street lost steam in late session, sending major indices into negative territory, as investors chose to stay on the sidelines, awaiting more clarity on the health of the U.S. economy from the closely-watched jobs report by the Labor Department.

Private payroll processor ADP revealed Thursday that U.S. private sector employment added 204,000 jobs in August, missing market expectations.

Moreover, the number of Americans who initially applied for jobless benefits in the week ending Aug. 30 added 4,000 from the previous week to a seasonally adjusted 302,000, said the Labor Department.

Other data came out positive, but failed to provide not many upward jolts for stocks. The U.S. international trade deficit in goods and services narrowed slightly to 40.5 billion U.S. dollars in July from the revised 40.8 billion in June, reported the Commerce Department.

U.S. non-manufacturing Purchasing Managers' Index registered 59. 6 in August, the highest since its inception in January 2008, according to the Institute for Supply Management.

U.S. nonfarm business sector labor productivity increased at a 2.3 percent annual rate in the second quarter, while unit labor costs in nonfarm businesses edged down 0.1 percent in the second quarter, the Labor Department reported Thursday.

The CBOE Volatility Index, often referred to as Wall Street's fear gauge, advanced 2.27 percent to end at 12.64.

In other markets, crude prices lost as a stronger greenback made the dollar-dominated oil less attractive for investors. Light, sweet crude for October delivery moved down 1.09 dollars to settle at 94.45 dollars a barrel on the New York Mercantile Exchange, while Brent crude for October delivery lost 94 cents to close at 101.83 dollars a barrel.

Gold futures on the COMEX division of the New York Mercantile Exchange retreated as the dollar strengthened, with the most active gold contract for December delivery down 3.8 dollars, or 0. 30 percent, to settle at 1,266.5 dollars per ounce.

The U.S. dollar gained against most major currencies and it rallied versus the euro after the ECB unexpectedly cut benchmark interest rates.

In late New York trading, the euro fell to 1.2939 dollars from 1.3145 dollars of the previous session, and the dollar bought 105. 23 Japanese yen, higher than 104.84 yen of the previous session.