The Dow and S&P 500 slipped on Thursday after JPMorgan's earnings and China's soft trade data revived worries about the impact of slower growth on profits.
The declines put an end to three straight days of gains that capped off a 12 percent increase in the S&P 500 since hitting a low on October 4. The Nasdaq stayed in positive territory, helped by semiconductor shares.
Some analysts said a pause was in store for the market, given the S&P 500's recent advance. The benchmark S&P 500 has had its largest seven-day rise since March 2009 on growing optimism that European leaders will find a way to contain the region's debt problems.
JPMorgan Chase & Co
It's early, but it seems like after having a series of great corporate earnings in the face of not-such-great macro numbers, now maybe we're seeing a little bit less robust corporate earnings, said Eric Kuby, chief investment officer of North Star Investment Management Corp. in Chicago.
Healthy U.S. profits have been among the biggest drivers for stocks since their March 2009 lows.
The Dow Jones industrial average <.DJI> fell 40.72 points, or 0.35 percent, to end at 11,478.13. The Standard & Poor's 500 Index <.SPX> shed 3.59 points, or 0.30 percent, to 1,203.66. But the Nasdaq Composite Index <.IXIC> gained 15.51 points, or 0.60 percent, to close at 2,620.24.
After the bell, shares of Google
Christmas came early for Google shareholders, said Colin Gillis, an analyst at BGC Partners. The digital economy is still strong. Google is capturing all the economics from this, and we are moving into the sweet spot when investors want to own Google.
China's trade surplus narrowed for a second straight month in September as both imports and exports were lower than expected, pointing to cooling domestic and global economic demand.
In U.S. economic data, new claims for jobless benefits were little changed last week and the trade deficit narrowed marginally in August, indicating a modest improvement in the economy.
According to a Reuters poll, analysts have reined in their expectations for U.S. economic growth, though it is still expected to pick up a notch by year-end.
JPMorgan, the first major U.S. bank to report earnings, said profits were hurt as the European debt crisis pushed investment banking clients to the sidelines. The KBW Bank index <.BKX> shed 2.9 percent while Bank of America Corp
Boosting the Nasdaq, Vertex Pharmaceuticals Inc
An index of semiconductors <.SOX> rose 2 percent.
About 7 billion shares were traded on the New York Stock Exchange, NYSE Amex and Nasdaq for the day, below the year's daily average so far of about 8 billion.
Declining stocks outnumbered advancing ones on the NYSE by a ratio of about 3 to 2, and on the Nasdaq, decliners slightly outpaced advancers.
(Reporting by Caroline Valetkevitch; Additional reporting by
Poornima Gupta; Editing by Jan Paschal)