Stocks Open Weaker

Stocks Open Weaker; American Express Weighs on Dow

NEW YORK—U.S. stocks slipped on Thursday, as technology stocks dragged and jobless claims and durable goods orders improved by less than expected.

The Dow Jones Industrial Average was down 46 points, or 0.5%, at 10192, in early trading. American Express was the Dow's worst performer, down 1.3%. Procter & Gamble led the measure, with the consumer goods company up 2.4% after its second-quarter profit dropped 7%, but earnings were higher than expected and sales grew.

The Standard & Poor's 500-share index was down 0.1%, with technology leading the declines. Cellphone chip-maker Qualcomm tumbled 14% in recent trading after cutting its sales outlook. The tech-heavy Nasdaq Composite was down 0.6%.

Associated Press

Ford shares rose after the company said it returned to a profit.

Earnings from headline companies rolled in Thursday morning, including Ford, up 2.5% in early trades after returning to a profit, and mobile phone maker Nokia, up 9.5% after stronger-than-forecast quarterly profit.

AT&T dropped 0.9% after its fourth-quarter earnings rose 25% on fewer charges as the company added the second-most wireless subscribers during a quarter in its history. And consumer goods maker Colgate-Palmolive gained 1.1% after its fourth-quarter earnings rose 27%, benefitting from higher prices, stronger margins and increased sales volume.

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After the close, Microsoft and Amazon.com will report earnings.

The market's early drop also followed President Barack Obama's first State of the Union address on Wednesday night. In his speech, the president called for a host of job creation measures and a redoubled effort to finish health-care reform. He pressed tax cuts to promote small-business hiring and business investment in plants and equipment, as well as a plan to devote $30 billion in Wall Street bailout funds for small-business lending through community banks. And he exhorted Congress to help him tame the record budget deficit, calling for a three-year freeze on spending on a small slice of the federal budget.

Investors largely welcomed Mr. Obama's focus on the financial system and how businesses must participate in the economic recovery.

"His acknowledgement of the role of businesses in creating jobs, it was good to hear that," said Stuart Schweitzer, global markets strategist for J.P. Morgan's private bank. Still, he said, the proposed tax breaks are "small potatoes, compared to the impact of the overall health of the economy."

Economic data released Thursday morning indicated that the economy continues to recover, though at a pace slightly slower than anticipated.

The Labor Department reported Thursday that the number of U.S. workers filing new claims for jobless benefits fell by 8,000 to 470,000 in the week ended Jan. 23. The previous week's level was revised to 478,000 from 482,000. Economists surveyed by Dow Jones Newswires expected initial claims to decrease by 32,000.

Separately, manufacturers' orders for long-lasting goods rose in December by 0.3% to a seasonally adjusted $167.91 billion, the Commerce Department said Thursday. Economists had projected a 2.0% increase. Excluding aircraft, capital goods orders rose 1.3%.

Still, Mr. Schweitzer noted that last years' declines in businesses' capital spending cut into the country's gross domestic product, and even a slower increase will be key to the economic recovery.

"I have been expecting that with business profit margins holding up and improving, that we would reach a position where businesses would be looking to increase capital spending again," he said. "Today's durable goods report is supportive of an improved outlook there."

In other markets, the dollar strengthened against both the euro and the Japanese yen. Crude oil futures rose, while gold futures also climbed. Treasurys slipped, with the 10-year note off 5/32 to yield 3.667%.

Still to come on Thursday, the U.S. Senate is expected to proceed with a vote on Fed Chairman Ben Bernanke's second term.