Stocks Trim Losses; Banks Gain, Techs Fall

Stocks shaved some of their earlier losses as financials gained but disappointing outlooks from the tech and consumer sectors weighed on the market.

The Dow Jones Industrial Average was down almost 40 points, led by Kraft, P&G and Intel. The blue-chip index had snapped a four-day winning streakon Wednesday.

The S&P 500and the Nasdaqwere also lower. The CBOE volatility index, widely considered the best gauge of fear in the market, fell slightly below 24.

Microsoft , Pfizer and Merck were among the Dow's top gainers. Merck is scheduled to report earnings on Friday.

St. Louis Fed President James Bullard, a voting member of the FOMC, rattled the market a litle after he said that the Fed may have to take the more severe measure of buying government debtif prices stay too low for too long, but said the risk of deflation is low.

Some market pros, like James Dailey, CIO at Team Asset Strategy Fund, cautioned that the current market is similar to the rally off the "Bear Stearns low" in March 2008.

“The euro crisis [is] similar to the Bear Stearns crisis where people thought it’s over,” Dailey told CNBC. “So the sovereign debt issues and the currency issues as we go forward are likely to re-emerge.”

Utilities, tech and consumer discretionary the worst performing sectors.

Trading in was halted briefly at 10:41 a.m. due to a 10 percent price spike within a five-minute trading period. NYSE Amex said all trades will stand after it had reviewed those executed at 10:41 a.m. between $23.67 and $26. The stock resumed trading at 10:46 a.m. Cisco did not provide any information.

Shares of Nvidia and Symantec plunged close to 10 percent after both chipmakers cut expectations for the next quarter. In addition, at least eight and five brokerages lowered their price targets on Nvidia and Symantec, respectively.

Among consumer stocks, Kellogg prices fell after the company posted lower-than-expected quarterly profitsand released a weak outlook.

Colgate-Palmolive tumbled more than 6 percent after the firm beat estimates and reaffirmed its outlook, but warned that currency devaluation in Venezuela would cause a greater impact than expected.

Visa also topped forecasts, but shares fell almost 5 percent after at least five brokerages lowered their price targets on the credit-card provider.

Energy stocks were mixed after strong earnings reports from energy producers, including ExxonMobil , the No. 1 company in market capitalization, and Royal Dutch Shell.

On Wednesday, ConocoPhillips reported a jump in second quarter income due to higher oil prices and bigger refining margins. And rival Chevron is expected to report earnings on Friday.

BP shares rose following news that the oil giant may permanently shut the well that caused the worst off-shore oil spill in U.S. history as early as Monday.

Shares of Anadarko Petroleum also rose, even as reports emerged that the SEC is investigatinglate spring trading activity in shares of both companies.

Treasury prices extended their lossesafter the government auctioned $29 billion in 7-year notes, fetching a high yield of 2.394 percent. The bid-to-cover ratio was 2.78.

And in the day's economic news, initial jobless claims dropped by 11,000 last week but continuing claims ramped up, with 4.57 million people are still receiving benefits.

Homebuilder stocks mostly rose across the board, with Beazer Homes jumping more than 4 percent, after mortgage rates dropped to the lowest level for the fifth time in six weeks, according to Freddie Mac.

And investors are waiting for the first release of second quarter GDP numbers, the broadest measure of the economy, on Friday. Economists are forecasting that GDP slowed to an annual rate of 2.5 percent, down from the first quarter's 2.7 percent, as the government cut back on economic stimulus programs.

surged almost 8 percent after the Japanese electronics maker reported a return to profitabilitythanks to sales of Bravia flat-screen TVs and PlayStation 3 consoles, and strength in emerging markets.

RadioShack shares rose almost 3 percent after the electronics retailer reported a higher profit, helped by the fact that it's now selling Apple's iPhone 4.

Amazon shares see-sawed following news that the online auctioneer is offering a $139 Kindle e-readerto appeal to the masses.

Toyota shares rose, despite the automakerannouncing another recall— this time of more than 400,000 vehicles in the U.S.

On the M&A front, France's Sanofi-Aventis plans to make a formal offer of up to $18.7 billion for Genzyme after its informal overture failed to strike interest, according sources familiar with the situation.

And Panasonic unveiled plans for a $5.7 billion share offering to help finance a buyout of Sanyo Electric in addition to another unit.

—Abby Schultz contributed to this article.

Still to Come:

THURSDAY: Earnings from Amgen after the bell
FRIDAY: First release of 2Q GDP; employment cost index; Chicago PMI; consumer sentiment; Earnings from: Chevron and Merck

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