Stocks End Mixed; Dow, S&P Fall for 3rd Day

Stocks ended mixed as the Dow and the S&P 500 posted moderate losses, falling for a third straight session, while tech stocks lifted the Nasdaq, as investors kept their attention on the events unfolding in the Middle East.

The Dow Jones Industrial Average fell 37.28 points, or 0.31 percent, to close at 12,068.50, after falling more than 100 points earlier in the session. The blue-chip index sank 107 points amid spreading unrest in the Middle Easton Wednesday.

Hewlett-Packard and Travelers led Dow decliners, while General Electric and Boeingled gainers.

The S&P 500 fell 1.30 points, or 0.1 percent, to close at 1,306.10. But the tech-heavy Nasdaq brought some positive news, rising 14.91 points, or 0.5 percent, to close at 2,737.90. The CBOE Volatility Index, widely considered the best gauge of fear in the market, fell more than 4 percent, below 21, after posting strong gains over the previous two sessions.

Among key S&P 500 sectors, energy, materials and consumer staples fell, while consumer discretionary and technology rose.

Stock bounced off the lows of the day as the price of U.S. light crude fell, closing at $97.28 a barrelamid unconfirmed rumorsthat Libyan leader Muammar Gaddafi was shot. However, U.S. officials said they have no reason to believe Gaddafi is dead. Earlier, oil prices had traded near $100 a barrel; London Brent crude gave up gains and closed slightly higher at $111.36 a barrel. Prices also eased after news Saudia Arabia was in talks with Europeanrefiners to cover any shortfall caused by the Libyan turmoil.

The energy sector led market declines much of the session, largely weighed down by the refiners. Halliburton , Schlumberger and Transocean were among the top laggards.

Gold, meanwhile, settled above $1,415 an ounce, but then traded lower. The dollar fell slightly against a basket of currencies.

Despite a spate of economic news, including a surprising drop in jobless claims, traders are focusing on Libya, said Todd Schoenberger, managing director at LandColt Trading.

"People are worried, just because of that uncertainty factor," Schoenberger said. "Things seem to be escalating. Where does this end? There are deep concerns there."

In the day's earnings news, General Motors tumbled even after the automaker posted earnings slightly above expectations and its first full-year profit since 2004. GM's results come at a pivotal time for investor sentiment in the auto industry, still widely seen as being in the early stage of recovery from its near-collapse in 2008 and 2009.

Target shares rose the retailer posted a 10.5 percent increase in profit. Rival Sears fell more than 5 percent after reporting profits which disappointed. The retailer also announced late Wednesday that it named the former CEO of Avaya, Lou D'Ambrosio, to lead the company after a three-year search. (Read more: Greenberg: Is the New Sears CEO a Joke?)

Meanwhile, shares of soared after the online travel company posted good results thanks to a surge in international bookings, and provided an optimistic outlook. At least seven brokerages raised their price targets for the company.

AIG , Gap, and Salesforce were expected to report earnings after the close.

Also in corporate news, Toyota Motor fell slightly after news the automaker was recalling 2.17 million vehicles in the United States to fix accelerator pedals.

Volume on the consolidated tape of the New York Stock Exchange was 5 billion shares, while 1.2 changed hands on the NYSE floor.

On the economic front, new home sales fell 12.6 percentin January to a seasonally-adjusted 284,000 from a drop of 8.8 percent to a downwardly revised 324,000 pace a month earlier.

Most of the homebuilders fell following the news, including DR Horton , PulteGroup and Toll Brothers .

Also in economic news, initial claims for unemployment fell by 22,000 to 391,000 last week, down from claims of 413,000 the week before, Labor Department reported. The four-week moving average of claims fell to 402,000, the lowest since mid-2008.

And new orders for durable goods soared 2.7 percent in January due to a boost in aircraft bookings, the Commerce Department said. The increase was in line with expectations.

Treasury prices held onto their gainsafter the government auctioned $29 billion in 7-year notes at a high-yield of 2.854 pecent, with a bid-to-cover ratio of 2.86, all largely in line with expectations. Treasurys have largely benefited as investors have viewed bonds as a safe haven, LandColt's Schoenberger said.

Shares in Europe fell for the fourth consecutive dayon the turmoil in Libya.

On Tap This Week:

THURSDAY: Earnings after-the-bell from AIG, First Solar, Gap and Salesforce.
FRIDAY: GDP (second reading), consumer sentiment; earnings before-the-bell from JCPenney.

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