NEW YORK: US stocks erased early gains on solid earnings reports from Caterpillar and Netflix to end lower Thursday, with some weak economic data and profit taking seeming to drive the selling.
The Dow Jones Industrial Average closed down 22.33 points (0.18 percent) at 12,734.63.
The broad-based S&P 500 slipped 7.60 (0.57 percent) to 1,318.45, while the tech-rich Nasdaq Composite dropped 13.03 (0.46 percent) to 2,805.28.
A modest rise in weekly jobless claims and poor figures for new-home sales in December helped repress bullish sentiment, said Andrea Kramer of Schaeffer's Investment Research.
The Dow blue chips got an early boost from Caterpillar, after it posted a 60 percent rise in net income to $1.5 billion for the fourth quarter of 2011.
Cat's stock rose more than four percent in early trade but closed with a modest 2.2 percent rise.
Video rental house Netflix was up 22.1 percent after it reported late Thursday solid gains in its streaming service subscriber base.
But shares in Dow member AT&T sank 2.5 percent after it turned in a whopping loss of $6.7 billion for the fourth quarter, mainly due to charges from its failed takeover of T-Mobile.
Staid, struggling retailer JC Penney surprised traders with a buoyant 2012 forecast, sending its shares rocketing 18.8 percent.
United Continental Holdings, the parent of merged United and Continental airlines, jumped 6.3 percent after reporting losses narrowed in its fourth quarter, beating analyst expectations of a worse performance.
Shares in biotech giant Amgen fell 1.6 percent after it announced the $1.16 billion purchase of German-American cancer research firm Micromet, a deal in which it obtains Micromet's promising leukemia therapy.
The deal was worth $11 a share for Micromet shareholders, and the share price on the Nasdaq soared $32.1 percent to just below that level, at $10.94.
Bond prices rose. The yield on the 10-year Treasury fell to 1.93 percent from 2.01 percent on Wednesday, while the 30-year slid to 3.09 percent from 3.15 percent.
Bond prices and yields in opposite directions.
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