Stocks were little changed on Thursday as a fresh dose of data pointing to more labor market weakness offset a search for beaten-down shares and optimism spurred by Nestle's strong results.

A government report showed that the number of U.S. workers continuing to claim jobless benefits jumped to a record in the first week of February.

That was followed by a report showing factory activity in the U.S. Mid-Atlantic region fell sharply in February. The two reports suggested the recession was worsening and marked a major hurdle for a market within striking distance of violating three-month lows.

Even so, consumer products maker Procter & Gamble
up 1.4 percent to $51.64, was the top boost to the Dow, after European rival Nestle, the world's biggest food maker, reported strong underlying 2008 sales growth and was cautiously upbeat for 2009.

We're going to need a whole lot of better news before we see some sustainability, said Cummins Catherwood, managing director at Boenning and Scattergood in West Conshohocken, Pennsylvania, adding: My personal feeling, if the Dow low gets violated, (is) that it's when I would start buying.

The Dow Jones industrial average <.DJI> shed 1.99 points, or 0.03 percent, to 7,553.64. The Standard & Poor's 500 Index <.SPX> rose 2.07 points, or 0.26 percent, to 790.49. The Nasdaq Composite Index <.IXIC> declined 2.22 points, or 0.15 percent, to 1,465.75.

A disappointing outlook from Hewlett-Packard Co pulled the technology bellwether lower, making it the top drag on the Dow, and contributing to a decline in other big-cap technology shares.

HP was off 7.5 percent at $31.51 on the New York Stock Exchange, while on Nasdaq Apple declined 3.5 percent to $91.07.

(Additional reporting by Chuck Mikolajczak; Editing by James Dalgleish)