Stocks Wobble as Jobless Pop Fizzles

An early pop fizzled Thursday as investors digested a mixed bag of economic and earnings news. Banks were mixed while techs gained.

Stocks had opened higher as investors chose to focus on the one positive data point this morning: The drop in the headline jobless-claims number.

The Dow Jones Industrial Average bobbed in and out of negative territory, after gaining more than 100 points in the previous session. The S&P 500 was flat, while the tech-heavy Nasdaq fared the best of the three.

The CBOE Volatility Index, widely considered the best gauge of fear in the market, ticked higher after closing at its lowest level since September a day earlier.

Initial jobless claims fell for second straight week to 610,000. However, continuing claims topped 6 million for the first time.

And housing starts dropped 10.8 percent in March after a 17.2-percent rise in February. Meanwhile, foreclosure activity leapt 46 percent in March from a year earlier, hitting a record high as mortgage companies' moratoriums came to an end, RealtyTrac reported.

The Philadelphia Federal Reserve delivered some encouraging news on the manufacturing front, reporting that a gauge of regional factory activity contracted much less in April than in March.

That followed an encouraging report from the New York Fed on Wednesday but market pros said they found nothing to cheer about in the report.

Still to come: Atlanta Federal Reserve President Lockhart is due to speak in New York at 1 pm New York time, while San Francisco Fed President Yellen will also talk in the Big Apple at 7.30 pm.

JPMorgan Chase rose more than 3 percent after the bank reported its earnings fell but beat expectations with earnings of 40 cents a share on revenue of $25.03 billion. The company set aside $10 billion against credit losses, more than twice the previous year.

And Goldman Sachs was flat after Rochdale Securities analyst Richard Bove upgraded the stock to "buy" from "neutral," and raised his price target on the stock to $152, saying the bank has firmed up its cash flow.

Tempering optimism in the market was news that General Growth Properties , the second-largest mall operator, has filed for Chapter 11 bankruptcy protection, making it one of the biggest victims of the credit crisis yet.

AIG is close to selling its US auto-insurance business to Swiss insurer Zurich Financial Services for roughly $1.5 billion.

And General Motors told U.S. dealers it was accelerating its timetable for closing dealerships as it rushes to meet the government's restructuring deadline on June, Reuters said, citing sources.

In tech land, Sun Microsystems pared its gains after IBM spurned its advances for new merger talks.

And Finnish handset maker Nokia delivered a positive outlook for the second half after reporting a weak first-quarter profit.

Among the morning's other earnings news: Motorcycle giant Harley Davidson narrowly missed Wall Street expectations, but shares rocketed 10 percent after the company affirmed its full-year shipment plans.

Southwest Air posted a loss of 3 cents a share, just shy of estimates, citing weak demand as customers cut back.

USA Today publisher Gannett reported its profit dropped 60 percent, kicking off what might be the worst quarter yet for newspapers. Still, shares rose as the results beat expectations by a penny.

Still to come: Results from Google and Biogen Idec are due out after the closing bell.

China reported its economy slowed in the first quarter to its weakest pace since records began in 1992.

Still to Come:

THURSDAY: Philly Fed survey; Fed's Lockhart, Yellen speak; Earnings from Google after the bell
FRIDAY: CNBC's 20th Anniversary; consumer sentiment; Bernanke speaks; Earnings from Citigroup, GE and Mattel

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