U.S. stocks mostly declined Thursday afternoon, with the S&P 500 retreating after rising to within two points of its record close and the Nasdaq Composite extending losses into a third day, as investors sorted through a mixed bag of earnings.
The afternoon reversal was "more technical than anything else," said Art Hogan, chief market strategist at Wunderlich Securities.
"If you have a failed breakout of an existing high or resistance level it tends to bring sellers into the market," he added.
While the S&P 500 ran up to an intraday high of 1,889, "1,885 is where we stalled out. If you look at a daily chart, that's where we seem to bump our head," Hogan said.
Priceline Group gained after the online travel company reported a 36 percent increase in quarterly profit. Tesla Motors declined after the electric car maker's second-quarter outlook, delivered late Wednesday, proved disappointing to some.
"The earnings excitement for the day is a little bit done. We had Priceline and Tesla last night, and a little bit of a run up on government numbers this morning, and now we're looking for something to trade on, so to speak," said JJ Kinahan, chief strategist at TD Ameritrade.
"Everything is hugging the zero line waiting for some news to trade on," Kinahan added.
Seven retailers tracked by Thomson Reuters tallied an overall 4.6 percent rise in April same-store sales, with teen retailer Zumiez posting an 8.2 percent gain. Gap was expected to report after Thursday's close.
"A lot of professional investors are absorbed in the earnings season, and it's been mixed. Although results have been quite good, this is the type of market where unless you clear the bar by a lot, you are simply not going to get rewarded for it," said Lawrence Creatura, portfolio manager at Federated Investors.
"The thing that has been more prominent is some data surrounding retail activity, as it appears a bit better than recent months. Part of that is due to the Easter shift, but perhaps part is something else," said Creatura.
Ahead of Wall Street's open, the Labor Department report initial jobless claims fell by 26,000 to to 319,000 last week, versus a 325,000 estimate. The four-week average rose to 324,750 from 320,250 the week before, the Labor Department said.
And, separate data showed on the year, defying expectations for a dip in both figures.
"We had good news on jobless claims, it looks like the jobs market is totally getting rid of the winter affect, and most likely we can begin to see jobs growth accelerate, so that's good news for the economy. We also had some good news out of China, their economy is stabilizing, so that's good news for the global economy," said Peter Cardillo, chief market economist at Rockwell Global Capital.
"I suspect we'll probably see the S&P 500 is going to attempt to move into new-record territory, perhaps later in the session," Cardillo added.
The Dow Jones Industrial Average climbed as much as 104 points, lifting it above its 16,580.84 record close set April 30, and ended 0.2 percent higher. AT&T and Walt Disneyled blue-chip gains that included 19 of 30 components.
DirecTV is considering a potential union with AT&T after a recent takeover approach from the wireless carrier, Reuters reported, citing people familiar with the matter.
After climbing to within 2 points of its record close, the fell 0.2 percent, with energy and utilities the worst performing and telecommunications and consumer discretionary the best of its 10 major sectors.
After clearing initial losses and rallying as much as 1 percent, the Nasdaq declined 0.4 percent.
For every two stocks rising, roughly three fell on the New York Stock Exchange, where nearly 474 million shares traded as of 3:30 p.m. Eastern. Composite volume surpassed 2.7 billion.
The European Central Bank on Thursday held its primary interest rate at record lows and ECB President Mario Draghi suggested in his news conference that the euro was too strong and was affecting inflation.
"Draghi did indicate at the June meeting he might be ready to pull the trigger," said Cardillo of the ECB head's comments, which prompted the euro to reverse its spike higher, falling back below 1.39 versus the dollar after nearly hitting 1.40.
"We see euro extending declines towards 1.3720 to 1.3700 before the Fed's yield realities impose a fresh cap on the dollar and provide support to the single currency," noted Ashraf Laidi, chief global strategist at City Index Limited.
On Wednesday, stocks pulled mostly higher, as Federal Reserve Chair Janet Yellen's testimony did nothing to rattle investors and after Russian President Vladimir Putin signaled a willingness to talk on Ukraine. The Nasdaq Composite, however, remained solidly in negative terrain, as investors continued to cycle out of so-called momentum stocks.
On Thursday, Yellen testified before a Senate Committee, reiterating remarks delivered the prior day before a joint House-Senate panel.
—By CNBC's Kate Gibson
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