Stock Market Story: July 6

NEW YORK (TheStreet) -- Stocks were slightly weaker as news of an interest rate hike in China and a downgrade to Portugal's government debt made investors jittery about the world economic outlook.

The Dow Jones Industrial Average was down by less than a point, or 0.01%, at 12,569. The S&P 500 was lower by 4 points, or 0.3%, at 1334, and the Nasdaq was off by 5 points, or 0.2%, at 2821.

On Wednesday, the People's Bank of China said it will raise benchmark deposit and lending rates by 0.25%. The increase was the third such move this year as China continues to try to rein in inflation.

European markets weakened after Moody's downgraded Portugal's government debt to junk status on Tuesday, heightening concerns about the financial health of the eurozone.

European banks are meeting to further discuss Greece's debt situation. According to a Wall Street Journal report, hopes that private bondholders would help with a bailout for Greece are fading since banks sold a significant amount of their Greek government holdings despite indications by some that they wouldn't.

The FTSE in London was slipping 0.7%, and the DAX in Frankfurt was shedding 0.4%. Hong Kong's Hang Seng declined 1% while Japan's Nikkei gained 1.1%.

Global uncertainty bolstered gold prices as investors sought safe-havens. Gold for August delivery was up by $15 at $1,527.70 an ounce.

The benchmark 10-year Treasury rose 8/32, diluting the yield to 3.093%.The dollar strengthened against a basket of currencies, with the dollar index up by 0.5%.

Investors are also occupied with key labor data due out at the end of the week. On Friday, the Labor Department is expect to report that the economy added 80,000 jobs in June after adding only 54,000 in May. The unemployment rate is projected to remain unchanged at 9.1%, according to Briefing.com.

The Institute for Supply Management will release its June non-manufacturing index at 10 a.m. Economists will be looking to see whether activity within the services sector picked from May's level of 54.6.

In corporate news, Berkshire Hathaway(BRK.A) is part of a bidding group in talks to buy Citigroup's(C) consumer-lending business, according to a Wall Street Journal report. Citigroup's stock was losing 1% to $42.14.