The Dow Jones industrial average (INDU) lost nearly 3 points, or less than 0.1%, to close at 11,822.8. The S&P 500 (SPX) slid over 1 point to end at 1,280. The tech-heavy Nasdaq (COMP) fell 21 points, or 0.7%, to close at 2,704.
Stocks opened lower Thursday after a stronger-than-expected report on China's gross domestic product "spooked people that China has more tightening to do than we originally thought," said Paul Zemksy, head of asset allocation at ING Investment Management.
"China is a very important part of the recovery and expansion of global GDP," he said. "Until we see signs of moderation in their growth and a slowdown in inflation, I think the market is going to be a bit jittery about that."
Commodity prices were also under pressure. Oil prices sank after the government reported a surprise jump in U.S. crude supplies. Gold and silver prices fell as the dollar strengthened.
The retreat came despite better-than-expected reports on U.S. home sales and weekly claims for unemployment benefits. Some traders said the market appears to be entering a "correction" phase, although any retreat is expected to be modest.
"With so much bullishness in the market, it's not surprising to see a bit of a pullback," said Brian Gendreau, market strategist at advisory firm Financial Network.
The dollar gained against the euro, the Japanese yen and the British pound.
Oil for March delivery fell $2.22 to close at $89.59 a barrel.
Gold futures for February delivery fell $23.70 to settle at $1,346.50 an ounce.
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