Stocks dip below record levels on Wall Street

May. 09, 2013 @ 11:53 AM

The stock market pulled back early Thursday after surging to record levels during the past week.

Even a decline in the number of Americans applying for unemployment benefits failed to boost stock prices in early trading.

Unemployment claims dropped by 4,000 last week to 323,000, a five-year low, the Labor department said Thursday. The decline signals fewer layoffs and possibly more hiring.

An improvement in hiring has been one of the factors helping to push stocks to record levels. The Dow Jones industrial average climbed above 15,000 for the first time Tuesday and is on track to notch six straight months of gains. The Standard and Poor's 500 index also closed at a record high Wednesday.

Rising corporate earnings, another support for the stock market, were also in focus on Thursday.

Tesla Motors soared $10.84, or 19 percent, to $66.54, after the electric car maker posted its first quarterly net profit since it was founded a decade ago. Green Mountain Coffee Roasters surged $15, or 25 percent, to $74.42 after the company reported late Wednesday that its net income rose 42 percent. It also raised its earnings forecast for the full year.

Monster Beverage, the maker of energy drinks, fell $3.52, or 6.2 percent, to $53.44, after it reported net income that fell short of analysts' estimates. The company's profits fell 17 percent, despite stronger sales, because of unfavorable currency rates, legal expenses and costs tied to distribution agreements.

Almost 90 percent of the companies in the S&P 500 index have reported earnings for the first quarter. Earnings are projected to rise 5 percent for the period and continue climbing throughout the year, according to S&P Capital IQ.

The Dow fell 17 points, or 0.1 percent, to 15,088 as of 11:22 a.m. Eastern Daylight Time. The Standard & Poor's 500 index dropped four points, or 0.2 percent, to 1,629.

So far, markets have defied expectations for a slowdown heading into the summer.

The Standard & Poor's 500 index has started the second quarter well, gaining 1.9 percent so far in the period. But the index has declined in the second quarter in each of the past three years. Stocks slumped as Europe's debt crisis intensified last year and in 2011 they dipped as wrangling in Washington pushed the U.S. to the brink of default.

"The market has had a phenomenal run," said Ron Florance, chief investment officer for Wells Fargo Private Bank. "We'll have to see how the second quarter plays out."

In government bond trading, the yield on the 10-year note continued to edge higher, climbing to 1.80 percent from 1.77 percent on Wednesday. The yield, which moves inversely to the bond's price, has risen from 1.63 early Friday before a surprisingly strong employment report.

The price of crude oil fell $1.09, or 1.1 percent, $95.54 and gold fell $8.70, or 0.6 percent, to $1,464.90. The dollar edged higher against the euro and the yen.

In other stock trading, the Nasdaq composite index, which his heavily weighted with technology stocks, was down three at 3,410.

Barnes & Noble surged $3.04, or 17 percent, to $20.80 after TechCrunch reported that Microsoft was considering acquiring the book retailer's digital book venture Nook Media for $1 billion.

Copyright 2013 The Associated Press.