U.S. stocks declined on Thursday after reports of another earthquake hitting Japan in less than a month, but markets were off their lows after a tsunami warning was lifted.

The S&P 500 Index declined 5.06 points, or 0.38 percent, to trade at 1,330.49 at 1:50 p.m. EDT. The Dow Jones Industrial Average declined 60.66 points, or 0.49 percent, to trade at 12,366.09. The Nasdaq Composite Index fell 0.21 percent.

Earlier Dow Jones Industrial Average declined nearly 100 points on news that another massive earthquake measuring 7.4 on Richter hit Japan at 11:32:41 pm in the night with the epicenter about 250 miles from Tokyo.

Stocks recovered from earlier losses after Japan’s NHK World TV reported that all tsunami alerts in the country have been lifted.

On the economic front, the applications for jobless benefits in the U.S. fell more than expected last week, recording a second consecutive weekly decline. Initial jobless claims in the US dropped by 10,000 to 382,000 compared with the revised figure of 392,000 in the previous week, while markets had expected the jobless claims to fall to 385,000 in the week.

Most of the U.S. retailers reported better than expected same-store sales results in March despite poor weather and higher gasoline prices. Costco Wholesale Corp. (NASDAQ:COST) shares gained 3.27 percent and Limited Brands Inc. (NYSE:LTD) gained 1.48 percent after reporting better than expected March sales.

Bed Bath & Beyond, Inc. (NASDAQ:BBBY) stock surged 9.76 percent as its fourth quarter earnings and revenue topped Street view.

The European Central Bank (ECB) raised the interest rates by 25 points to 1.25 percent, its first since July 2008 to check the rising consumer prices in the region. However, ECB president Trichet said at a news conference that ECB's rate hike on Thursday was not necessarily the first in a series.