By Melinda Peer

NEW YORK (TheStreet) — The technology, financial and health care sectors were leading stocks lower Thursday despite earlier news that initial weekly jobless claims continued to edge lower.

The Dow Jones Industrial Average was down by 19 points, or 0.2%, to 10,878. The S&P 500 was losing 4 points, or 0.3%, to 1168 and the Nasdaq was off by 11 points, or 0.5%, at 2414.

Markets have been struggling to find their footing following news of the European Union financial rescue package as investors question whether the plan will be enough to keep sovereign debt issues at bay.

"You can't solve debt problems with more debt and monetization," said Michael Pento, senior market strategist at Delta Global Advisors who believes that markets are seeing a temporary reprieve but that sovereign debt problems will resurface and metastasize.

I don't believe that this rescue package will be enough to cover losses and I don't think the Greek citizenry will agree to austerity measures. Plus, the absence of government spending is going to reduce their GDP. If I was wrong, then the euro would be rising but it's not and that's because debt and monetization can never be the solution to a debt crisis."

Overseas, Hong Kong's Hang Seng gained 1% Thursday, and Japan's Nikkei jumped 2.2%. The FTSE in London added 0.9%, and the DAX in Frankfurt rose 1.1%.

The Economy

The Labor Department said initial weekly jobless claims fell by 4,000 to 444,000 in the week ended May 8.

The Department's Bureau of Labor and Statistics said import prices rose by 0.9% in April while export prices jumped 1.2% higher.

The Energy Information Administration said natural gas storage levels rose by 94 billion cubic feet, which was lower than the injection of 100 to 104 billion cubic feet that analysts had been projecting for the week ended May 7.

Company News

Shares across the financial sector were slipping after a New York Times report said New York Attorney General Andrew Cuomo is investigating whether several major banks misled rating agencies about the quality of certain mortgage-backed securities in an attempt to get higher ratings on those securities. Banks included in the investigation are Goldman Sachs(GS), Morgan Stanley(MS), UBS(UBS), Citigroup(C), Credit Suisse(CS), Deutsche Bank(DB), and Merrill Lynch, which has since been acquired by Bank of America(BAC).

Federal prosecutors and securities regulators are also conducting a preliminary criminal probe looking at how the major banks represented their roles in certain mortgage securities deals to clients.

Shares of Cisco Systems(CSCO) were losing 4.5% even though the company beat Wall Street estimates late Thursday with an adjusted profit of 42 cents a share.

Retailers Kohl's (KSS) and Urban Outfitters(URBN) also reported better-than-expected earnings. The stocks, however, were slipping by 3.6% and 4%, respectively.

Wendy's Arby's Group(WEN) posted a first-quarter loss of a penny a share. Excluding charges, the company earned 2 cents a share, which was a penny higher than analysts' estimates. Sales fell 3% but were better than expected at $837.4 million. The stock was down by 4.1%.

Transocean(RIG), which owned and operated the drilling rig that exploded, causing the disastrous oil spill currently spreading in the Gulf of Mexico, plans to file a federal court petition to put a cap on its legal liability at slightly under $27 million, according to Dow Jones Newswires report. BP(BP), which had leased the rig is footing the bill for cleaning up the mess but Transocean could face lawsuits related to damages resulting from the spill. Transocean's stock was trading 0.5% lower to $67.82, and shares of BP were slipping 0.3% to $48.35.

Commodities and the Dollar

Following the EIA report, the June natural gas contract was gaining 9 cents to trade at $4.37 per million British thermal units. Crude oil for June delivery, meanwhile, was shedding 3 cents, to $75.62 a barrel.

Elsewhere in commodity markets, the June gold contract was down by $8.80 to trade at $1,234.30 an ounce.

The dollar was trading higher against a basket of currencies, with the dollar index up by 0.3%.

The U.S. Treasury's $16 billion auction of 30-year bonds had a high yield of 4.490% and a bid-to-cover ratio of 2.60.

The benchmark 10-year Treasury strengthened 2/32, diluting the yield to 3.571%.

The two-year rose slightly with a yield of 0.863%. The 30-year bond fell 2/32, raising the yield to 4.476%.