By TIM PARADIS and IEVA M. AUGSTUMS (AP)
NEW YORK — A drop in energy stocks is dragging the market lower following a government report that consumers and businesses are trimming use of oil and gas.
A jump in energy supplies last week is stirring worries Thursday that the economy will struggle to recover. Oil fell below $77 a barrel.
The drop in energy erased early gains from technology stocks, which rose after 3Com Corp. agreed to a $2.7 billion takeover by Hewlett-Packard Co. and as Intel Corp. said it would pay $1.25 billion to Advanced Micro Devices Inc. to settle legal disputes.
At midday, the Dow Jones industrial average is down 53 at 10,238. The Standard & Poor’s 500 index is down 7 at 1,092. The Nasdaq composite index is down 8 at 2,159.
THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP’s earlier story is below.
NEW YORK (AP) — Stocks mostly fell Thursday as gains in technology stocks failed to lift the broader market after days of steep gains.
The technology-heavy Nasdaq composite index outpaced other indicators as 3Com Corp. surged after agreeing to a $2.7 billion takeover by Hewlett-Packard Co. and as Intel Corp. said it would pay $1.25 billion to Advanced Micro Devices Inc. to settle legal disputes.
Investors reacted coolly to other signs of improvement in the economy. The Labor Department said new claims for unemployment insurance fell to a seasonally adjusted 502,000 from an upwardly revised 514,000 the previous week. That’s the fewest claims since the week ending Jan. 3, and below economists’ estimates.
Wal-Mart Stores Inc. reported third-quarter earnings that beat analysts’ expectations, though sales at stores open at least a year dropped during the quarter. The nation’s biggest retailer said sales at existing stores would range from a drop of 1 percent to a gain of 1 percent in its fourth quarter, a disappointment for investors. Sales at stores open at least a year are an important indicator of a retailer’s strength.
Because of its size, Wal-Mart is seen as a key indicator of consumer spending trends. Investors are still not convinced that spending by consumers will pick up enough to spur a strong recovery in the economy.
Meanwhile, Kohl’s Corp. said higher sales helped lift its third-quarter profit 21 percent.
Frank Ingarra Jr., co-portfolio manager at Hennessy Funds in Stamford, Conn., said the news in the technology industry was a sign that companies are getting set up for an improvement in the economy but that the market is likely to pause after the big gains of the past week.
“There is very light volume so it looks like the market wants to do a little consolidating here,” he said.
In late morning trading, the Dow Jones industrial average fell 32.73, or 0.3 percent, to 10,258.53. The Dow rose 519 points, or 5.3 percent, in the past six days, the longest stretch of gains since an eight-day advance in late August.
The broader Standard & Poor’s 500 index fell 3.58, or 0.3 percent, to 1,094.93, and the Nasdaq slipped 1.32, or 0.1 percent, to 2,165.58.
Both the Dow and the S&P 500 index closed at 13-month highs Wednesday, so some modest moves in stocks weren’t surprising.
Falling stocks outpaced those that rose on the New York Stock Exchange two to one, where volume came to 232.4 million shares compared with 289 million shares traded at same point Wednesday.
Bond prices were mixed. The yield on the benchmark 10-year Treasury note, which moves opposite its price, was flat at 3.48 percent from late Tuesday. Bond markets were closed Wednesday for Veterans Day.
Crude oil fell $1.58 to $77.70 per barrel on the New York Mercantile Exchange. Gold fell.
The Russell 2000 index of smaller companies rose 2.84, or 0.5 percent, to 595.55. The drop in oil weighed on energy stocks. Chevron Corp. slipped 10 cents to $78.41, while Schlumberger Ltd. fell 20 cents to $65.94.
Among tech stocks, 3Com rose $1.79, or 31.5 percent, to $7.48, while H-P fell 11 cents, or 0.2 percent, to $49.89.
Advanced Micro rose $1.18, or 22 percent, to $6.60, while Intel rose 9 cents, or 0.5 percent, to $19.93.
Wal-Mart rose 61 cents, or 1.2 percent, to $53.58, and Kohl’s advanced 39 cents, or 0.7 percent, to $54.98.
Overseas, Japan’s benchmark Nikkei stock average fell 0.7 percent. In afternoon trading, Britain’s FTSE 100 rose 0.5 percent, Germany’s DAX index rose 0.6 percent and France’s CAC-40 rose 0.7 percent.
Ieva Augstums reported from Charlotte, N.C.

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