NEW YORK, Aug 26 (AFP) - Wall Street drifted mainly lower in morning trade Thursday as a rise in US jobless claims and disappointment from the corporate earnings front overshadowed a further decline in oil prices.
The Dow Jones Industrial Average dipped 7.89 points (0.08 percent) to 10,173.85 and the Nasdaq fell 6.24 points (0.34 percent) to 1,854.48 at 1530 GMT.
The broad-market Standard and Poor's 500 index lost a fractional 0.58 point to stand at 1,104.38.
Sentiment was hit by news that jobless claims rose by 10,000 to 343,000 in the past week, largely due to the impact of Hurricane Charley, and weaker-than-expected reports from retailers Starbucks and Krispy Kreme and semiconductor company Credence.
Additionally, analysts said there was a pullback from Wednesday's rally that pushed the Dow to a six-week high.
The positive news was a further drop in the price of crude oil, which opened with a decline of 67 cents at 42.80 dollars a barrel.
"You're running into some technical resistance, and with volume being light, it's going to take a little bit of energy to run through it," said Paul Mendelsohn, chief investment strategist at Windham Financial Services.
Mendelsohn said many investors are likely to remain on the sidelines in the session ahead of Friday's second quarter gross domestic product figures and a key speech from Federal Reserve chairman Alan Greenspan.
Among active shares, Starbucks tumbled 2.97 to 43.07 after the coffeehouse chain said its sales in the four weeks to August 22 rose eight percent, well below expectations for a double-digit increase.
Krispy Kreme sank 1.65 or nearly 11 percent to 13.71 after the doughnut retailer reported disappointing earnings for the past quarter.
Semiconductor maker Credence Systems slid 48 cents to 6.99 after its earnings fell short of analyst forecasts.
The banking sector was in focus as Toronto-Dominion Bank confirmed that it was buying a 51 percent controlling stake in Maine-based Banknorth Group for 3.8 billion dollars. Shares of the Canadian firm slid 76 cents to 33.41 while Banknorth shares dipped 42 cents to 34.46 after rising 10 percent Wednesday.
Energy firms were pressured by the sharp declines of the past week in crude prices. ExxonMobil fell 17 cents to 45.02 and ConocoPhillips slid 68 cents to 71.38.
Bonds were firm. The yield on the 10-year US Treasury bond retreated to 4.239 percent against 4.261 percent Wednesday and that on the 30-year bond dipped to 5.028 percent against 5.050 percent. Bond yields and prices move in opposite directions.