(CNBC) — U.S. stocks declined on Thursday, positioning the Dow and S&P 500 for their first monthly losses since January, as an unexpected drop in European inflation fueled worries about deflation there and a jump in U.S. labor costs furthered the idea that the Federal Reserve would have to hike interest rates sooner rather than later.
"The good news is getting lost in the shuffle, and for the time will take a back seat to weakness in European markets on deflationary fears," said Art Hogan, chief market strategist at Wunderlich Securities.
Investor sentiment was also hit by Argentina's default after hopes for a deal with holdout creditors fell through. Argentinian stocks traded in the U.S. were hit, including Pampa Energy off TK.
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