Stocks Give Up Early Gains On Mixed Earnings

Stocks turned lower Thursday as investors dug through a raft of earnings reports that painted a mixed picture about the economy. The Dow Jones industrial average fell more than 30 points in midday trading. The market rose steadily in the opening moments of trading following a surprise drop in first-time claims for unemployment benefits.

There was encouraging news in results from Eastman Kodak Co., which got a lift as more customers turned to home and office printers, an area the company is ramping up to replace its faltering photographic film business. Motorola Inc.'s phone division was profitable for the first time in three years as the company bets consumers will snap up more smart phones like the Droid X.

But strong results at those companies were offset by disappointments at 3M Co. and Avon Products Inc. 3M's grim view about the U.S. and European economies was a sobering reminder that growth in many developed nations remains weak. The maker of everything from Post-It notes to Scotch Tape called growth in those regions "uninspiring."

In a reversal of recent global growth trends, it was emerging markets that disappointed Avon investors. The beauty products seller said weakness in Brazil and Russia hurt quarterly profits. Many companies have relied heavily on expansion in developing countries to offset lagging sales in the U.S. and Europe.

Rob Russell, president of financial planning company Russell & Co., said weak corporate outlooks also made for a disappointing batch of reports Thursday. 3M cut its full-year forecast. Colgate-Palmolive Co. said it expects sales growth to slow next year, while Apple Inc. warned in a regulatory filing that profit margins might narrow next year.

Mixed earnings over the past few days sapped energy from an upswing on the stock market, which has been on a nearly unbroken rise since early September.

Pharmaceutical companies Bayer AG and Sanofi-Aventis SA and automaker Hyundai Motor Co. kicked off earnings worldwide with upbeat results, sending stocks higher overseas before U.S. markets opened.

A surprise drop in claims for unemployment insurance provided the most encouragement about the economy. Claims fell to their lowest level in three months, bolstering hopes that companies might start ramping up hiring soon. First-time claims fell by 21,000 to 434,000 last week, while economists had expected a rise. Claims had been hovering around 450,000 throughout much of the year, which is considered a signal that employers aren't firing many people, but not hiring many either.

The Dow fell 31.02, or 0.3 percent, to 11,095.44 in midday trading. It had been up 53 points earlier in the day.

The Standard & Poor's 500 index fell 1.33, or 0.1 percent, to 1,181.12, while the Nasdaq composite index fell 2.11, or 0.1 percent, to 2,501.15.

Not even a falling dollar could provide support for the market. Stocks and commodities have been very sensitive to the movement of the dollar in recent weeks. A decline in the dollar makes riskier assets priced in the currency, such as gold, oil and domestic stocks, more attractive to investors.

The euro rose back above $1.39 against the dollar Thursday. Gold rose $19.40 to $1,342.00 an ounce.

Bond prices rose. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 2.67 percent from 2.72 percent late Wednesday.

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