NEW YORK - US stocks traded lower Thursday, with the Dow Jones Industrial Average bouncing off a five-month low, as a mixed batch of earnings reports and concern over a slowing economy weighed on sentiment.
The Dow industrials was down 22 points at 10,382, clawing its way from 10,343.49, its lowest level intraday since November 5.
The Nasdaq Composite Index fell seven points to 1,967 while the S and P 500 Index dipped 1.5 points to 1,172.
"It's follow-through from yesterday," said Jim Paulsen, chief investment officer at Wells Capital Management. "Yesterday's retail sales numbers have garnished massive media coverage on an (economic) slowdown."
And fear of an economic slowdown is affecting the way investors look at the latest earnings reports, said Paulsen.
"Any negative earnings report gets massive coverage any good report just slips by."
On the broader market for equities, decliners outpaced advancers by 19 to 10 on the New York Stock Exchange, and by a 16 to 10 score on the Nasdaq.
Within the Dow, Caterpillar Inc. fell 1.9 percent, Alcoa Inc dropped 1.5 percent and DuPont slid 1.5 percent on concern these companies would be among the first to suffer from an economic slowdown.
"In the last two years, they've been the stars of the market outside energy," said Paul Nolte, director of investments at Hinsdale Associates. "As the economy has strengthened, they've done very well."
"But they are turning lower in the anticipation that the economy is slowing."
Nolte said there appeared to be some rotation into safe-haven sectors such as drug stocks, which offer solid returns in times of slowing economic growth.
The Amex Pharmaceutical Index , which tracks the drug sector, was up 0.6 percent in morning trading.
General Motors was another notable decliner on the Dow, down 4.7 percent on concern discretionary spending on items such as cars would fall in lockstep with an economic slowdown.
Ahead of the bell, two economic reports allowed investors to take the pulse of the US economy.
First-time claims for state unemployment benefits fell by 10,000 to 330,000 in the week ended April 9, roughly in line with economist forecasts.
Meanwhile, US businesses added 0.5 percent to their inventories in February while their sales fell 0.4 percent, the Commerce Department said. The drop in sales was the largest since April 2003.
The dollar gained against the yen after the International Monetary Fund drastically slashed its growth forecast for Japan. The euro got a cross-trading kick lower on the greenback's rise against the Japanese currency.
Gold futures tumbled as the strength of the dollar sapped interest in the precious metal.
On the bond market, long-term US Treasurys rallied on the weaker-than-expected sales component of the business inventories data.
Crude-oil futures briefly slipped below 50 dollars a barrel for the first time since February 22 before turning higher as some traders sought to take advantage of a 3% decline in the prior session on inventory concerns.
04/14/2005 15:53 GMT