Stocks fell on Thursday, on track for a third day of losses after jobless claims data missed heightened expectations as stocks wrap up their best first quarter in 14 years.

New U.S. jobless claims fell to a four-year low last week but still missed forecasts, while the previous week's number was revised higher. Analysts pointed out that jobless claims, after a period of improvement, showed signs of stalling - a worry for investors - in the latest report.

The data today is evidence that we're not going to have the robust recovery we had been expecting. The economy is growing, and the labor market is healing, but both on a very slow basis, said Michael Yoshikami, chief executive officer of Destination Wealth Management in Walnut Creek, California.

U.S. household income grew at a faster pace in the fourth quarter than previously thought, which could help underpin spending this quarter, according to the Commerce Department's final estimate of growth in gross domestic product for the quarter.

The S&P 500 is up almost 11 percent this quarter, its best start to the year since 1998 and its best quarter since the third period of 2009.

Some analysts are looking for a market pullback early in the second quarter after the strong early run as investors seek confirmation that the economy is not about to slow.

We've had an incredible rally, and in order for us to keep moving up, we're going to need data that is very strongly positive, not just lukewarm, Yoshikami said.

Limiting the Dow's loss was Coca-Cola Co , up 0.7 percent at $73.19.

The Dow Jones industrial average <.DJI> was down 48.36 points, or 0.37 percent, at 13,077.63. The Standard & Poor's 500 Index <.SPX> was down 10.24 points, or 0.73 percent, at 1,395.30. The Nasdaq Composite Index <.IXIC> was down 26.43 points, or 0.85 percent, at 3,078.53.

All 10 S&P 500 sectors fell, with financials <.GSPF>, a group closely tied to prospects for economic growth, down 1.6 percent. Wells Fargo & Co fell 1.8 percent to $33.85. The three relatively strongest sectors - utilities <.GSPU>, health care <.GSPA> and consumer staples <.GSPS> - are all considered defensive plays.

The S&P 500 is off only 0.1 percent this week, with the day's decline erasing the gains from Monday's strong rally.

Best Buy Co Inc fell 7.3 percent to $24.67 and was the S&P 500's biggest decliner. The electronics retailer reported weaker-than-expected sales, and said it will close 50 big-box stores and cut 400 jobs.

Shares of JetBlue Airways tumbled 7.3 percent to $4.84 on heavy volume after Lufthanasa said it would offer a bond that was exchangeable into up to 4.67 million shares of JetBlue, a move seen as dilutive.

Going against the market's overall downtrend for the day, shares of Illumina Inc rose 4.3 percent to $52.02 after Roche Holding AG increased its offer for the U.S. gene sequencing company in hopes of winning over Illumina shareholders before the annual meeting next month.

Red Hat Inc surged 17.6 percent to $60.45 - its highest since 2000 - after the business software maker's profit beat expectations for the fifth straight quarter.

In the retail sector, the shares of watch and accessories company Fossil Inc slid 0.6 percent to $131.84. Fossil Inc will replace Medco Health Solutions Inc in the S&P 500 as Express Scripts Inc acquires Medco in a deal expected to be completed soon. The date of the index change has yet to be announced.

(Editing by Jan Paschal)

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