By Tomi Kilgore and Chris Dieterich
U.S. stocks edged lower early Thursday, as disappointing results
from Google and International Business Machines helped pause the
market's three-day rally.
The Dow Jones Industrial Average slipped 35 points, or 0.2%, to
16388 in early trading. The S&P 500 fell three points, or 0.2%,
to 1859 and the Nasdaq Composite Index declined 15 points, or 0.4%,
to 4072.
Stocks have rallied in recent days after a selloff in technology
and biotechnology stocks helped drag the Nasdaq Composite down 8.2%
through Friday from March 5, when it closed at a 14-year high. The
Dow finished last week at a two-month low.
It has been a different story this week, as buyers have stepped
into the market to stabilize the hardest hit sectors. Major
benchmarks have risen for three days in a row. Despite the recent
volatility, the S&P 500 closed Wednesday 1.5% below its April 2
record high of 1890.90.
"The market had pulled back, but it wasn't frenzied selling,"
said Dan McMahon, director of equity trading at brokerage firm
Raymond James. "People were having a tough time finding value," he
said. "Now, they say: 'There is some value here now, and let's step
in.'"
Corporate earnings were in focus, with a raft of blue-chip
companies posting their quarterly results.
Google fell 3.3% after reporting late Wednesday earnings that
missed analyst estimates, as the amount advertisers pay per click
continued to decline.
IBM slumped 4.3% after the technology giant's first-quarter
earnings matched estimates but revenue declined more than expected
on continued declines in hardware sales.
The tone was upbeat for investment banks. Goldman Sachs gained
1.6% after the investment bank's first-quarter earnings and revenue
declined from year-ago levels, but exceeded analyst forecasts.
Morgan Stanley rallied 2.2% after exceeding earnings and revenue
forecasts, helped by strength in its trading business.
On the economic front, initial claims for jobless benefits in
the latest week increased by 2,000 to 304,000, versus expectations
of a rise to 315,000. The previous week's total was revised up
slightly from 300,000, the lowest level seen since 2007, to
302,000.
After the open, the Philadelphia Federal Reserve's index of
manufacturing activity for April is seen ticking up to 10.0 from
9.0 in March.
General Electric rose 1.8% as first-quarter operating earnings
fell, but topped analyst estimates amid strength in its industrial
business.
DuPont slipped 0.6% after missing earnings and revenue
forecasts.
American Express slipped 0.1% after beating earnings estimates
but missing on revenue.
BlackRock declined 1.3% even after its earnings handily topped
Wall Street views, as revenue jumped and investors poured money
into its mutual funds.
The U.S. stock market is closed Friday for Good Friday.
The yield on the 10-year Treasury note ticked up to 2.652% from
2.637% late Wednesday.
Gold futures eased 0.1% to $1302.20 a troy ounce, while
crude-oil futures added 0.2% to $103.91 a barrel. The dollar lost
ground against the euro and the yen.
European markets advanced, with the Stoxx Europe 600 gaining
0.2%. Germany's DAX 30 index added 0.7%, France's CAC 40 ticked up
0.4% and the U.K.'s FTSE 100 added 0.3%.
Asian markets were mixed. Japan's Nikkei Stock Average was
little changed, pausing after a 3% run-up in the previous session,
while China's Shanghai Composite gave up 0.3%.
Write to Tomi Kilgore at tomi.kilgore@wsj.com