The Dow Jones Industrial Average fell 135 points, down for the first time in five sessions. The S&P 500 dipped 0.3% and the Nasdaq Composite also declined 0.3%. The market was closed on Wednesday for Christmas Day.

The major averages could see their first down day this week after back-to-back gains. So far, the S&P 500 is up 1.6% this week, while the Dow has gained 0.8%. The strong rally in megacap tech lifted the Nasdaq up 2.1% week to date.

Investors were enthusiastic about the so-called Santa Claus rally, which occurs in the last five trading days of the year and the first two in January. Since 1950, the S&P 500 has generated an average return of 1.3% during this period, widely outpacing the market's average seven-day return of 0.3%, according to LPL Research. Thursday marks the second day of the Santa rally.

"The Santa Claus Rally may be alive and well. We'll see, or it could be tough sledding," Michael Zinn, UBS Wealth Management's senior portfolio manager, said on CNBC's "Squawk Box." "It's a sleepy time of year. The institutions aren't really trading. It's a little bit more retail driven. So what happens at the end of the year is not necessarily an indicator for how January and February go."

On the data front, jobless claims for the week ended Dec. 21 totaled 219,000, compared to the 225,000 consensus forecast from Dow Jones. However, continuing claims, or recurring applications for unemployment benefits, rose to 1.91 million, reaching the highest level since Nov. 13, 2021.

Month to date, the S&P 500 is up by 0.1%, while the tech-heavy Nasdaq has rallied 4.2%, thanks to the strong gains in Tesla, Apple and Alphabet. The blue-chip Dow, however, is down about 3.6% in the meantime, on track for its worst month since April.(Cay) Newsmaker23

Source: CNBC