Stocks trade mixed after dip in jobless claims

NEW YORK - Stocks fluctuated in a narrow range early Thursday after the government reported a dip in last week's jobless claims and as oil prices showed volatility.

The Labor Department reported that initial claims for unemployment declined by 5,000 last week from the previous week. The market's reaction was muted, however. The decrease was a bit smaller than expected, and the four-week moving average of initial claims, a less volatile indicator, rose — a sign that the U.S. job market remains strained.

Stocks have fallen this week as concerns about tight credit returned amid profit declines at major investment banks and signals that the industry is going to have to raise more cash. With the nation's money centers under stress, it appears the economy will have a hard time rebounding; borrowing is essential to growth.

Wall Street will examine the Philadelphia Federal Reserve's report on regional manufacturing and the Conference Board's May index of leading indicators for some additional information on the direction of the economy.

In the first hour of trading, the Dow Jones industrial average fell 13.52, or 0.11 percent, to 12,015.54.

Broader stock indicators declined. The Standard & Poor's 500 index fell 2.31, or 0.17 percent, to 8,983.98, and the Nasdaq composite index fell 5.36, or 0.22 percent, to 2,424.35.

Bond prices fell ahead of the manufacturing report. The yield on the benchmark 10-year Treasury note, which moves opposite its price, edged up to 4.17 percent from 4.14 percent late Wednesday.

Crude oil futures, which had been higher following reports of an attack on an installation in Nigeria, fell $2.38 to $134.30 per barrel on the New York Mercantile Exchange after several news reports that China plans to raise oil prices. Such a move could dampen demand.

In earnings news, Circuit City Stores Inc. posted a first-quarter loss that was wider than last year's due to sinking sales at established stores. The electronics retailer also said it is suspending its dividend. The company's per-share loss was slightly smaller than analysts expected, but its revenue was lower. Circuit City fell 15 cents, or 3.7 percent, to $3.90.

The dollar traded mixed against other major currencies, while gold prices rose.

Declining issues outnumbered advancers by about 5 to 4 on the New York Stock Exchange, where volume came to 108.6 million shares.

The Russell 2000 index of smaller companies fell 0.40, or 0.05 percent, to 730.31.

Overseas, Japan's Nikkei stock average sank 2.23 percent. In afternoon trading, Britain's FTSE 100 rose 0.28, Germany's DAX index ticked up 0.02 percent, and France's CAC-40 fell 0.16 percent.

(Agencies)