There was plenty of discouraging news. Applications for unemployment benefits rose last week and manufacturing slowed in the mid-Atlantic region. Wal-Mart sank after warning that its customers were spending less at its stores.
The Dow Jones industrial average fell 42.47 points to 15,233.22, a loss of 0.3 percent. The Standard & Poor's 500 index dropped 8.31 points to 1,650.47, down 0.5 percent. It was only the third drop for the S&P 500 this month. Both indexes closed at record highs the day before.
"We've had such a tremendous run," said J.J. Kinahan, chief strategist at TD Ameritrade. "On a day with a bunch of disappointing data, you're looking for some good news to hold on to."
The manufacturing report from the Philadelphia branch of the Federal Reserve sent bond prices up and turned stocks lower in morning trading. The stock market recovered before noon, then spent most of the day with slight gains until the news that John Williams, head of the Federal Reserve's San Francisco branch, told an audience that the Fed could end its bond-buying program this year. But Williams' comments made clear that the Fed would only curtail its stimulus effort when the economy looked strong enough.
Cisco jumped 13 percent, or $2.68, to $23.89. The network-equipment maker turned in quarterly results late Wednesday that beat analysts' expectations, with the help of better revenue from the U.S. and emerging markets.
Cisco's performance is often considered a gauge of the technology industry's strength, and tech stocks fared better than the rest of the market Thursday. Technology was the only one of the 10 industry groups in the S&P 500 index to close higher.
The Nasdaq composite index lost 6.37 points to 3,465.24, a drop of 0.2 percent.
Dell Inc. reported fiscal first- quarter profit that missed analysts' estimates, underscoring a worsening outlook that bolsters a buyout proposal by its founder to turn around the personal-computer maker as a private company.
Profit excluding some items fell to 21 cents a share for the period that ended May 3, from 43 cents a year earlier, Round Rock, Texas-based Dell said in a statement.
Wal-Mart fell 2 percent after it recorded weaker sales and a dim forecast for profits.
