By Victor Reklaitis, MarketWatch

NEW YORK (MarketWatch) -- U.S. stocks edge lower on Thursday afternoon amid a continued advance for the Japanese yen that some traders said was negative for all assets perceived as risky.

Before moving more decisively south, stocks had been fluctuating between small gains and losses in choppy trading after data showed a decline in weekly jobless claims and as investors awaited the May employment report due on Friday morning.

After falling as much as 116.37 points, the Dow Jones Industrial Average (DJI) was lately down 58.36 points, or 0.4%, to 14,902.

Oil major Chevron Corp. (CVX) fell 2%, making it the biggest decliner in the blue-chip index.

The S&P 500 index (SPX) lost 1.50 points, or 0.1%, to 1,607.34, with information technology the biggest decliner among its 10 major industry groups. Telecommunications was the top gainer.

The Nasdaq Composite (RIXF) slid 8 points, or 0.2%, to 3,394.

"It all has to do with the yen carry trade," said Andrew Brenner, head of international fixed income at National Alliance Securities, referring to the afternoon selloff for stocks and other risk assets. He said there was no specific news Thursday, just continuing trends and more selling of the dollar versus the yen.

"People are taking losses on the yen carry trade, and they're forced to sell their risk assets," he said. The yen carry trade involves selling the yen and using the proceeds to buy higher-yielding assets.

The dollar (USDJPY) slumped on Thursday to trade below 97 Japanese yen.

Ahead of the opening bell, data showed that U.S. jobless claims fell by 11,000 to 346,000 in the week ended June 1, essentially in line with expectations. Traders are watching labor-market data closely for any clues as to when the Federal Reserve may begin to scale back its $85-billion-a-month bond-buying program, which has supported equity prices.

Also before the open, the European Central Bank kept interest rates unchanged, as expected, and in his monthly news conference ECB President Mario Draghi largely stuck to views he has expressed previously.

The government's May jobs report is a day away, and the market has been displaying jitters about it.

Marc Pado, U.S. market strategist at investment-advisory firm DowBull, said the market needs a jobs number that hits a "sweet spot," and in the meantime, traders can expect some hesitation in stocks.

If the jobs number is too good, stocks could fall on worries the Fed will taper its bond buys, but a figure that's too low also would weigh on stocks, according to Pado. "I think that's why you're seeing such choppy action today," he said. "What the market needs now in order to bounce off this level is a sweet-spot number in the middle."

The Labor Department's jobs report will be released at 8:30 a.m. Eastern time on Friday. Economists polled by MarketWatch expect a rise of 164,000 in nonfarm payrolls and an unchanged jobless rate of 7.5%.

The odds of a smaller increase in payrolls, however, grew on Wednesday after a disappointing ADP report on private-sector jobs.

Andrew Wilkinson, chief economic strategist at Miller Tabak, said it's a little premature to expect a rally before Friday's payrolls report.

"I don't necessarily think the selling pressure's gone away," Wilkinson said. He added that the market's recent move down is healthy and "could go on for several more weeks."

Food company J.M. Smucker Co. (SJM) was the biggest decliner in the S&P 500, falling 4.2%.

Shares of L Brands Inc. (LTD) fell 3% after it said its monthly same-store sales rose 3%. Analysts polled by Thomson Reuters expected a same-store sales increase of 3.2%

Shares of SodaStream International Ltd. (SODA) added 4.5%. Israel's Calcalist newspaper reported that PepsiCo Inc. (PEP) is in talks to buy SodaStream for $2 billion. However, PepsiCo told MarketWatch that the report was "completely and totally untrue."

Overseas, Japan's Nikkei Stock Average fell 0.9% and the Stoxx Europe 600 index dropped 1.2%.

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