U.S. stocks ended lower on Thursday as gloomy U.S. economic data and continuous European debt woes still weighed on the market.

When the market closed, the Dow Jones industrial average lost 26.41 points, or 0.21 percent, at 12,393.45. The Standard & Poor's 500 was down 2.99 points, or 0.23 percent, to 1,310.33. The Nasdaq Composite Index retreated 10.02 points, or 0.35 percent, to 2,827. 34.

Major indexes were much lower in earlier session, with the blue- chip Dow losing as much as 103 points, after the latest batch of economic data came in weaker than expected.

According to the Labor Department, the number of people applying for unemployment benefits rose 10,000 to a seasonally adjusted 383,000, while economists were expecting the reading to be around 370,000, a level signaling mild improvement in jobs sector.

Meanwhile, private-sector jobs increased only 133,000 from April to May, much less than previous estimates of 150,000, according to a report by Payroll processing company ADP.

Adding to pressures, the U.S. Commerce Department revised the gross domestic product for the first quarter to 1.9 percent annual rate from 2.2 percent. The downward revision suggested that the U. S. economic recovery was not as optimistic as investors had anticipated.

Apart from dismal U.S. economic data, concerns over European debt crisis, which has dragged the market for weeks, still weighed the market on Thursday.

The European Central Bank and European Commission warned that if no stronger measures or tough fiscal discipline were implemented, the single currency area could face the risk of disintegration.

However, stocks pared earlier losses in late session, with the Dow and S&P 500 returning to positive area, as rumor said the International Monetary Fund (IMF) has started discussing contingency plans for a rescue loan to Spain in the event that the country fails to find the funds needed to bail out its third- largest bank by assets, Bankia SA.

The gains, unfortunately, didn't hold to the last minute as both the Spanish government and the IMF denied there is any discussion of future bailout plans between the two parties.