NEW YORK - Wall Street closed essentially flat Thursday after struggling to resume a modest upward trend while investors juggled upbeat economic data, divergent earnings reports and a pullback in Chinese stocks. The Dow Jones industrials edged higher to a record close for the second straight day.
While a mix of profit reports pushed and tugged at stocks Thursday, investors also watched markets abroad, where stocks fell following word that economic growth in China's first quarter jumped a higher-than-expected 11.1 percent and inflation increased at the fastest pace in more than two years. Chinese officials said they would take steps such as raising interest rates to curb growth.
Wall Street fell at the opening, then began to pare its losses after a research group said its barometer of future economic activity rose slightly in March, signaling modest growth in coming months. The Conference Board said its index of leading economic indicators rose 0.1 percent, as expected, to 137.4 in March. The reading follows two straight months of declines.
The Dow rose 4.79, or 0.04 percent, to 12,808.63 - its sixth straight gain. On Wednesday, the Dow reached fresh trading and closing highs, perhaps signaling a recovery from a late February pullback that was in part triggered by a selloff on the Chinese market. Wednesday's trading high of 12,838.46 and that session's close broke records set Feb. 20.
Broader market indicators dipped Thursday. The Standard & Poor's 500 index fell 1.77, or 0.12 percent, to 1,470.73, a day after the S&P hit a 6 1/2-year high. The Nasdaq composite index fell for the third straight session, slipping 5.15, or 0.21 percent, to 2,505.35.
Bond prices fell after three straight sessions of gains following the release of decent economic data and some robust earnings reports. The yield on the benchmark 10-year Treasury note rose to 4.67 percent from 4.66 percent late Wednesday.
China's sometimes volatile Shanghai Composite Index tumbled 4.5 percent Thursday. However, its decline wasn't as steep as the nearly 9 percent drop Feb. 27 that touched off the worldwide sell-off and shaved more than 3 percent from the major U.S. indexes that day. Stocks in Europe fell Thursday, though at more modest levels than in Asia.
Japan's Nikkei stock average fell 1.67 percent. Britain's FTSE 100 closed down 0.14 percent, Germany's DAX index declined 0.54 percent, and France's CAC-40 slipped 0.12 percent.
Most major U.S. companies - even those reporting drops in first-quarter profits - have been exceeding the forecasts of analysts, who lowered their expectations after the stock market plunged in late February amid worries about tumbling markets overseas, the weakening dollar, a slowing economy and financial troubles among subprime lenders, which make loans to those with poor credit.
EBay Inc. fell $1.26, or 3.7 percent, to $33.19 Thursday, after the online auctioneer posted a 52 percent surge in its first-quarter earnings in part due to lower taxes and a decrease in outstanding shares.
Nokia Corp., the world's largest mobile phone maker, said its first-quarter net profit declined by 6.6 percent amid slipping handset prices. However, it said its share of the global mobile phone market increased. Nokia advanced 78 cents, or 3.3 percent, to $24.65.
Merrill Lynch & Co. said first-quarter profits soared from a year earlier, when the nation's largest retail brokerage booked a charge related to compensation expenses. Merrill rose 55 cents to $90.11.
Dow component Merck & Co. said its first-quarter profit jumped 12 percent as the drug company saw higher sales and sold off some products. Merck rose 46 cents to $50.15.
Another drug maker, Schering-Plough Corp. said its first-quarter profit soared 55 percent, boosted by strong demand for its Remicade drug and other products; its results beat Wall Street's forecast. Schering-Plough rose $2.45, or 8.6 percent, to $31.
Another one of the 30 stocks that make up the Dow industrials, Altria Group Inc., said its first-quarter profit fell 21 percent as it saw weakness in domestic cigarette sales. The parent of Philip Morris raised its full-year earnings forecast, however, which could offset some concern about the quarter's results. Altria fell 68 cents to $69.40.
Intel Corp. was the biggest gainer in the Dow, rising 46 cents, or 2.2 percent, to $21.81, after an analyst upgrade.
UnitedHealth Group Inc., the nation's second-largest health insurer, fell $2.16, or 4 percent, to $52.05, after the company recorded payments related to its stock options problems and lackluster enrollment in Medicare-related programs.
In other economic data Thursday, the Labor Department said weekly applications for unemployment benefits slipped by 4,000 to 339,000 after hitting a two-month high a week earlier. Weekly figures can be volatile and the overall unemployment rate remains low. In March, it fell to 4.4 percent, flat with a five-year low.
Investors appeared unconcerned by a report from the Philadelphia Federal Reserve that showed a weaker-than-expected increase in regional manufacturing.
Light, sweet crude settled down $1.30 at $61.83 per barrel on the New York Mercantile Exchange.
Gold prices edged lower, while the dollar slipped against the euro and the British pound. The euro is near an all-time high against the dollar and the British pound is trading at 26-year highs versus the U.S. currency.
Declining issues outnumbered advancers by about 2 to 1 on the New York Stock Exchange, where consolidated volume came to 2.94 billion shares compared with 2.93 billion shares traded Wednesday.
The Russell 2000 index of smaller companies fell 5.06, or 0.61 percent, to 819.32.