NEW YORK, Dec. 31 (Xinhua) — Wall Street retreated on the final day of the year as encouraging job data showed the economy was heading to the right direction but also spurred concerns for a sooner rate hike.

Major averages opened slightly higher, drawing support from a report showing weekly jobless claims unexpectedly fell to the lowest level in 18 months.

The Labor Department said before the bell that the number of newly laid-off workers filing claims for unemployment benefits in the United States fell by 22,000 to a seasonally adjusted 432,000 in the week ended Dec. 26, the lowest level since July 2008, while economists were expecting for a rise.

New jobless claims have dropped steadily in recent months, raising hopes that U.S. labor market was healing, which is vital for a sustained recovery. However, it also added to evidence the economy is strengthening enough to allow the Federal Reserve to withdraw more stimulus programs.

With the New Year just around the corner, trading has been quiet during the last two weeks as many investors were away for their holidays. Those who remain in the market tend to avoid making big bets after a year of significant gains and wait for the arrival of 2010 to draw clues about the direction of the markets.

The Dow Jones dropped 60.53 to 10,487.98. Broader indexes also traded in negative territory. The Standard & Poor’s 500 index lost 4.55 to 1,121.87 and the Nasdaq fell 7.88 to 2,283.40.