Bad month for stocks ends on a sour note

They sold in May and went away, all right.

With a disappointing finish Thursday, the U.S. stock market closed what was by some measures its worst month in two years.

Over five dismal weeks, Facebook fizzled, a debt crisis in Europe loomed and nobody was in the mood to buy.

When May was mercifully over, the Dow Jones industrial average and other major indexes had erased most of the strong gains they built up through March and held on to in April.

“Any time the market dips like this, it erodes some confidence,” said Craig Callahan, co-founder and president of Icon Advisers in Denver. “It scares people out of the market.”

The Dow closed down 26.41points Thursday to end the month at 12,393.45. It declined on all but five of 22 trading sessions.

The Standard & Poor’s 500 index dropped 2.99 points to close at 1,310.33. The Nasdaq composite index fell 10.02 points to 2,827.34.

On Thursday, investors latched on to a bit of good news in the morning: May sales from retailers including Target and Macy’s looked healthy.

Then the government offered two unpleasant pieces of economic data. The number of people applying for unemployment benefits rose to a five-week high, and economic growth from January through March was slower than first thought.