By Anora Mahmudova and Barbara Kollmeyer, MarketWatch

Dow's drive for 20,000 loses steam

U.S. equities struggled to pick up the "Santa Rally" on Thursday, with the main indexes edging modestly lower for a second straight session.

Investors are navigating thin volumes, which can at times exacerbate moves, however. Thursday marks the next to the last trading session of the year.

The S&P 500 , which saw the biggest one-day and percentage drop since Oct. 11 (http://www.marketwatch.com/story/dow-on-track-to-make-a-fresh-attempt-to-hurdle-over-20000-2016-12-28) on Wednesday, was down 3 points, or 0.1% at 2,247. Five of the 11 main sectors were trading in positive territory, led by real estate and utilities. Meanwhile financials and technology shares lagged.

The Dow Jones Industrial Average was off 26 points, or 0.1% at 19,807. Goldman Sachs Group Inc(GS) and J.P. Morgan Chase & Co (JPM) were leading the losses, down more than 1%.

The Nasdaq Composite was off by 14 points, or 0.3% at 5,424.

"Markets have already booked solid gains this year, with the S&P 500 up 10%. But extremely low volumes indicate there aren't many participants to take his market much higher or lower until after the holidays," said Michael Antonelli, equity sales trader at Robert W. Baird & Co.

See:Why Dow 20,000 isn't a foregone conclusion in 2016 (http://www.marketwatch.com/story/dow-20000-isnt-a-foregone-conclusion-in-2016so-dont-break-out-the-bubbly-2016-12-22)

Ahead of the opening bell, stock-index futures were virtually unchanged after mixed economic data. Weekly jobless claims (http://www.marketwatch.com/story/jobless-claims-tumble-10000-to-265000-2016-12-29)tumbled to extremely low levels, that have been the norm since last summer. Meanwhile, the trade deficit widened by more than expected.

Opinion: Santa seems to be a no-show at the stock market again (http://www.marketwatch.com/story/santa-seems-to-be-a-no-show-at-the-stock-market-again-2016-12-28)

Stocks have been rallying on the view that President-elect Donald Trump's administration will spur economic growth via spending and tax cuts, though there have been concerns that the moves have come too far and too fast. Meanwhile, expectations that inflation will rise as well have pushed up interest rates, and mortgage rates have been jumping in step with that.

"It will be interesting to see how much more the defensive stocks like utilities and REITs will fall and how far up financials will go. The economic background is favorable, but valuations are still a problem for investors," said Antonelli.

Read:All the important Dow milestones in one chart (http://www.marketwatch.com/story/all-of-the-important-dow-milestones-in-one-chart-2016-12-28)

Stocks to watch: A $750 million defamation lawsuit was filed against CBS Corp.(CBSA) on Wednesday by Burke Ramsey, the older brother of a 6-year-old beauty queen who was mysteriously killed in 1996. Ramsey claims a prime-time special by the network defamed him for publicity and profit. (http://www.marketwatch.com/story/jonbenet-ramseys-brother-sues-cbs-for-defamation-2016-12-28) CBS shares were up 0.5%.

Nvidia Corp(NVDA) shares fell another 4.2%, adding to Wednesday's losses, after Citron Research announced a short position in the stock.

See:Tech event in January could spur volatility, more Nvidia gains, Goldman says (http://www.marketwatch.com/story/tech-event-in-january-could-spur-volatility-more-nvidia-gains-goldman-says-2016-12-29)

Fortress Biotech Inc.(FBIO) shares declined 22% to $2.81 after the company reported a breakthrough with a cancer treatment that has suffered of late.

Shares of clinical-stage drug company Cempra Inc.(CEMP) fell 3.4%, after the U.S. Food and Drug Administration said it cannot approve a pneumonia drug (http://www.marketwatch.com/story/cempra-shares-crater-on-concerns-about-delay-in-getting-pneumonia-drug-approved-2016-12-29)without additional safety data and improvements at a manufacturing facility.

Other markets: The dollar was under pressure on Thursday (http://www.marketwatch.com/story/dollar-weakens-against-yen-taking-a-hit-on-weak-us-home-sales-2016-12-29) against major rivals, and strength in the Japanese yen contributed to a 1.3% drop for the Nikkei 225 index . Elsewhere, Asian stocks were mixed. Europe logged moderate losses (http://www.marketwatch.com/story/european-stocks-break-3-day-winning-run-deepen-losses-for-2016-2016-12-29), with banking shares under pressure.WTI oil futures declined after government data showed a rise in U.S. crude inventories (http://www.marketwatch.com/story/oil-prices-slide-as-us-supply-data-shows-unexpected-spike-2016-12-29).

Gold and silver prices rallied, with both up more than 1%.

(END) Dow Jones Newswires

December 29, 2016 12:46 ET (17:46 GMT)

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