Stocks turned weaker again in the wake of disappointing economic news, and ahead of major earnings releases.
JPMorgan and Hewlett-Packard led the Dow lower, while Kraft gained.
The S&P 500 and the Nasdaq also fell. The CBOE Volatility Index, widely considered the best gauge of fear in the market, rose above 17.
Most key S&P sectors fell, led by financials and technology.
Trading remains largely directionless as investors as investors have little sense of what direction the market is going to move with the bulk of earnings releases yet to come. A little more insight into the tech industry could come with Google's release after-the-bell, said J.J. Kinahan, chief derivatives strategist at TD Ameritrade.
"Google is not a pure tech play so to speak, but it's the first major component of that industry," he said. "People are looking for something to point to."
Trading could also be affected by the monthly expiration of futures and options on Friday, he said.
"You’ll see some interesting trades today," Kinahan said, including "things that don't make sense."
Earlier, for instance, the VIX fell along with S&P futures. Usually, the VIX moves in the opposite direction of stocks.
Financials were among the weakest sectors on Thursday, a day after JPMorgan released strong earnings that nonetheless disappointed once investors looked more closely at the results. Bank of America reports earnings before the market opens on Friday.
Meanwhile, Goldman Sachs fell after a U.S. Senate report on Wall Street's role in the financial crisis published Wednesday accused of misleading clients and manipulating markets in mortgage-bond deals leading up to the financial crisis. Deutsche Bank , which was also cited in the report, fell too.
The Securities and Exchange Commission has also launched an investigation into whether a number of banks including Bank of AmericaUBS and Citigroup colluded to manipulate Libor rates according to a report in the Wall Street Journal.
Microsoft skidded after Morgan Stanley noted declining demand for personal computers could hurt the computer firm. Roth Capital, meanwhile, downgraded Intel to "neutral" citing a slowdown in PC sales as well as the company's lack of progress with smartphones and tablets.
First Solar sank after investor Jim Chanos said on CNBC that the maker of thin film solar panels was "problematic" and was experiencing a large amount of insider selling.
Toys R Us is also in focus following a Reuters report the toy retailer is targeting an initial public offering in July.