Stocks clung to modest losses Thursday after a mixed batch of economic data failed to convince investors to move prices higher.
The Dow Jones Industrial Average fell more than 25 points, led by Alcoa , Bank of America , and Caterpillar. Hewlett-Packard and Cisco rose.
The S&P 500and the Nasdaqalso fell. The CBOE Volatility Index, widely considered the best gauge of fear in the market, rose above 22.
Most key S&P 500 sectors were lower, led by energy, financials and consumer discretionary stocks. The technology sector rose.
The major indexes extended September's rally Wednesday and remain on track to stay in positive territory for the third straight week.
The market is failing to move higher today as again, although it is not selling off sharply either, as investors don't have enough convinction to break out of a trading range that has held the S&P below 1,230 and above 1,040 since mid-May.
Because Thursday's mixed economic data — jobless claims easing but inflation rising — doesn't provide enough information on the future direction of the economy, traders may be simply taking profits today, said Nate Peterson, Senior Derivatives Analyst for Charles Schwab.
"I don’t feel it’s enough information to drive buyers or sellers," Peterson said.
Friday is quadrapule witching, when index futures, index options, equity options and security futures all expire, but like the equity markets, option volume is "surprisingly light," with only about 13 million contracts trading a day, instead of a year-to-date avearge of 15.3 million contracts a day, according to Peterson.
The lack of volume is similar to what's happening in the equity markets, "which may imply that conviction in the most recent rally is lacking," Peterson and Randy Frederick, director of trading and derivatives at Schwab wrote in a research note.
Earlier Thursday, shares of economic bellwether FedEx fell after the transportation company reported its quarterly profit doubled, although it was just shy of expectations. The company also said it plans to cut 1,700 jobs to trim costs. Shares of rival UPS also slipped.
In other earnings news, shares of Pier 1 Imports soared after the home decor retailer reported better-than-expected results for the second quarter ended August 28. The company cited strong sales, costs controls, and fewer promotions. Pier 1's net income was $14.4 million, or 12 cents a share, compared with a loss of $15.8 million, or 17 cents a share a year earlier.
Gamestop jumped after the company announced it would buy back $300 million in stock and would retire $200 million debt. The company has had strong sales, and generated positive cash flow.
Meanwhile, Netflix shares fell despite Credit Suisse raising its rating on the stock to "neutral" from "underperform" because of the company's shift to streaming videos. Amazon.com shares, meanwhile, are higher after Benchmark raised its price target for the company to $165 from $148.
The U.S. Justice Deparment is investigating whether Google's purchase of ITA Software, the airline ticketing firm, will hurt rivals in the travel business who need airline data. Shares of Expedia, meanwhile, are higher.
In the energy sector, Williams sank after its pipeline unit slashed its earnings outlook for the next few years because of low commodity prices. Rivals TransCanada and Atlas Pipeline were also lower.
Also, shares plummeted for oil and gas companies downgraded by Lazard Capital on Thursday. Shares of independent natural gas producer Quicksilver and Cabot Oil & Gas were cut to "sell" from "hold," and Denbury Resources was cut to "hold" from "buy."
Ford Motor rose after Barclays Capital upgraded the stock to "overweight" from "equal weight," and lifted the automaker's price target to $16 a share from $15. The analysts cited Ford's increased earnings power, based on good products and pricing, and reduced costs.
In other corporate news, the new CEO of GM, Daniel Akerson, told reporters Thursday it may take a couple of years before taxpayers get all their money backfrom the automaker. Akerson said GM's goal is to repay the money, but the initial public offering expected later this year won't be enough.
Meanwhile, Barclays cut its forecast for the auto sales industry to 12 million units from 13.5 million units in 2011.
In economic news, the Philadelphia Federal Reserve reported manufacturing in the Mid-Atlantic is falling at a slower rate. Factory activity slipped to 0.7 percent in September, from a 7.7 fall in August.
Jobless claims fell unexpectedly by 3,000 to 450,000, the lowest level in two months, the U.S. Labor Department said. The figure had been expected to rise to 460,000. At 450,000, jobless claims are within a range considered by economists to create sustainable job growth. Claims also were significantly below the high of 504,000 reached a month ago.
The August Producer Price Index, meanwhile, rose 0.4 percent, slightly more than expected, and the biggest increase in five months, according to the Labor Department. The PPI rose 0.2 percent in July. Core PPI was 0.1 percent in August, also in line with expectations, after rising 0.3 percent in July.
Also on Thursday, the U.S. current account deficit widened in the second quarter to $123.3 billion, or 3.4 percent of gross domestic product, the U.S. Commerce Department said.
In a piece of positive news, nearly 51 percent of individual investors surveyed by the American Association of Individual Investorswere bullish for the week ended September 15, up 7 percent from last week.
Japanese policy makers had hoped to see extended weakness in the currency as a result of market intervention Wednesday, but the yen's decline against the dollar failed to continue. Prime Minister Naoto Kan indicated the country was prepared to intervene again to ease the currency's strength in a bid to help the export sales. Meanwhile, the Bank of Japan said it is ready to introduce more quantitative easing in October if necessary, according to reports.
The dollar weakened slightly against the yen in morning trade while it also fell against a basket of foreign currencies.
On the Calendar:
THURSDAY: After-the-bell earnings from Oracle and Research In Motion
FRIDAY: CPI, consumer sentiment
More From CNBC.com: