NEW YORK (CNN/Money) - Stocks pared their losses Thursday morning, but chip stocks remained weak after brokerage UBS Warbug cut its ratings on the semiconductor sector.

Also pressuring the market: Lehman Bros. cut its earnings forecast for General Electric, as investors also took note of two reports pointing to a weak economy.

Just after 10:15 a.m., the Nasdaq composite edged up about 3 points to 1,317 after falling about 1 percent earlier. The Dow Jones industrial average pared its losses and was off about 60 points at 8,633 while the Standard & Poor's 500 index lost 6 to 911.

Lehman cut its 2003 earnings estimate for General Electric (GE: down $0.91 to $30.39, Research, Estimates), saying the current markets conditions warrant the action.

UBS Warburg downgraded chip equipment maker Novellus Systems (NVLS: up $0.07 to $24.25, Research, Estimates) amid a broader downgrade of the semiconductor equipment sector, saying that signs of a lackluster economic recovery was taking its toll on market demand.

Meanwhile, Sun Microsystems (SUNW: down $0.11 to $3.85, Research, Estimates), the leading supplier of Unix servers, likely will draw attention for a second day in a row. The company is scheduled to deliver its mid-quarter update after the close. Sun took a hard knock in the previous session on bearish comments from Goldman Sachs, indicating the company could miss estimates for its first quarter

The Commerce Department said its second reading of U.S. gross domestic product (GDP) growth in the second quarter was unrevised at 1.1 percent, matching expectations, compared with growth of 5 percent in the first quarter.

Separately, the Labor Department said new claims for unemployment benefits rose to 403,000 in the week ended Aug. 24 from a revised 395,000 the prior week. Economists, on average, expected 385,000 new claims, according to Briefing.com.

In overseas markets, stocks tumbled in Europe at midday, while Asian-Pacific stocks also lost ground.

Treasury prices rose for a second straight session, pushing the yield on the benchmark 10-year Treasury down to 4.13 percent. The dollar fell against both the euro and the yen. Brent crude oil futures shed 7 cents to $26.88 a barrel in London.