U.S. stocks were little changed on Thursday, paring losses after weaker-than-expected jobless claims and helped by a rise in Marathon Oil.
Contributing to the weakness was a sharp drop in shares of Merck on disappointing drug trial news. The drugmaker was the biggest percentage decliner on the S&P 500.
Weekly initial claims for unemployment benefits rose the most in six months, the Labor Department said, suggesting the jobs market still faces headwinds.
Profit taking corrections often happen when there is a negative piece of news, and this job claims news could be one negative event that those market traders were looking for, said Tim Ghriskey, chief investment officer of Solaris Asset Management in Bedford Hills, New York.
Marathon Oil Corp
The Dow Jones industrial average <.DJI> declined 13.10 points, or 0.11 percent, to 11,742.34. The Standard & Poor's 500 Index <.SPX> rose 0.19 point, or 0.01 percent, to 1,286.15, and the Nasdaq Composite Index <.IXIC> added 4.36 points, or 0.16 percent, to 2,741.69.
Shares of drugmaker Merck & Co
Merck's drop took a toll. The S&P Health Care index <.GSPA> declined 0.67 percent and the ARCA Pharmaceutical index <.DRG> fell 0.88 percent.
In a potentially encouraging sign, however, continuing claims retreated sharply to 3.88 million from 4.13 million. Producer prices rose more than expected in December as energy and food costs surged, but underlying inflation remained subdued.
Traders were focused on the next major company due to report earnings, chipmaker Intel Corp
JPMorgan Chase & Co
Spain and Italy followed Portugal with successful debt sales on Thursday, and investors showed growing confidence that governments would agree to new measures to stem the debt crisis.
After the sale, European Central Bank President Jean-Claude Trichet warned investors the euro zone economy still faces short-term inflationary pressures and warrants close scrutiny.
(Reporting by Alina Selyukh; Editing by Kenneth Barry)