NEW YORK (CNN/Money) - Stocks drifted lower Wednesday, hurt by tech issues after some weak earnings, as investors got ready for a slew of economic reports at the end of the week.

Some discouraging earnings in technology and developments at AOL Time Warner and Vivendi drove stocks to a lower close Wednesday, while the afternoon release of the Fed's "beige book" offered some positives but failed to spark buying.

The week's key economic reports start Thursday, with the first look at second-quarter gross domestic product, the broadest measure of the nation's economy, as well as weekly jobless claims and manufacturing in the Chicago area.

But Friday is the big kahuna: the July jobs report, a revision of U Michigan consumer sentiment, ISM's manufacturing numbers and personal spending and income data are all due.

Reports showing a drop in weekly jobless claims and a rise in durable goods orders released last week revved hopes the economy was picking up steam, but Tuesday's weak consumer confidence report partly eroded the optimism.

On the upside, analysts say the consumer confidence figures reflect fears about the lagging labor market, rather than to a setback for a recovery. In addition, following the weak report Tuesday, bonds tumbled, sending the yield on the 10-year note to a one-year high, a move seen as supportive of the recovery.

Even with a bit of a reversal in Treasurys Wednesday, "bonds seem to be implying that the recovery is on the way," said Sarat Sethi, a portfolio manager at Douglas C. Lane & Associates. "If you get some acceleration in GDP growth, that might help reinforce that."

The GDP report is due out before the markets open Thursday. Economists surveyed by Briefing.com expect the pace of economic growth accelerated to a 1.5 percent annual rate from the first quarter's 1.4 percent annual rate.

The number of Americans filing new claims for unemployment last week is forecast to have risen to 400,000 from 386,000 the previous week, underscoring the likelihood that the previous report, which showed a surprising drop, was a fluke that related to seasonal factors rather than a change in the labor picture. The report is also due before the open.

After trading begins, the Chicago Purchasing Managers' Index for July is due. It's forecast to have risen to 53.8 from 52.5 last month.

Two Dow components report results before the open Thursday. Exxon Mobil (XOM: down $0.11 to $35.32, Research, Estimates) is expected to have earned 56 cents per share, up from 39 cents a year earlier, according to First Call, while Procter & Gamble (PG: up $0.65 to $87.75, Research, Estimates) is expected to have earned 86 cents per share, up from 77 cents a year earlier.

Stocks have rallied for more than four months on hopes that a second-half economic recovery will yield the next leg of a stock rally. But with a lot of the earnings out of the way, the major indexes have been drifting of late, waiting for the next big impetus. In the last four weeks, the major indexes have essentially been caught in a big trading range.

"The action right now is fine, but the concern is that the market seems to be stuck in this trading range," said Fred Sears, chief investment officer at Investor Capital Funds. "But we think it's fine to invest if you're looking at the long term. Summer is always a hard time. All the fund managers are on vacation, and volume is very light."

The Nasdaq composite (down 10.46 to 1720.91, Charts) lost 0.5 percent, while the Dow Jones industrial average (down 4.41 to 9200.05, Charts) and the Standard & Poor's 500 index (down 1.79 to 987.49, Charts) closed fractionally lower.

Released at 2 p.m. ET, the Federal Reserve's "beige book" -- a summary of June economic conditions in the 12 districts covered by the Federal Reserve -- showed that the economy has been picking up but that capital spending remains weak and that prices are still sluggish.

Speaking at a press conference, President Bush defended his actions in Iraq and his tax cuts, which he said were slowly helping to boost the economy, although he did acknowledge the continued weakness in the labor market.

Neither the report nor Bush's comments affected stocks Wednesday.

CNN/Money parent AOL Time Warner (AOL: down $0.72 to $15.17, Research, Estimates) lost 4.5 percent and topped the NYSE's most-active list after the Wall Street Journal reported that the Securities and Exchange Commission has asked its America Online unit to provide documents related to its bulk Internet subscription plans. The unit already is the subject of a federal accounting probe.

MGM (MGM: up $1.00 to $13.84, Research, Estimates) said late Tuesday that it was withdrawing its bid for Vivendi's (V: down $0.69 to $17.82, Research, Estimates) U.S. entertainment assets because the price was too steep.

There were few big-name earnings releases Wednesday. No. 3 U.S. health insurer Aetna (AET: down $1.99 to $66.50, Research, Estimates) reported stronger results that topped estimates in a midday report (released ahead of schedule), but investors bailed out of the stock nonetheless.

A number of tech earnings also disappointed, including chipmakers Genesis Microchip (GNSS: down $2.75 to $11.00, Research, Estimates) and Cree (CREE: down $3.18 to $13.43, Research, Estimates), both of which tumbled in active Nasdaq trade. Genesis Microchip warned about the current quarter and Cree reported earnings that improved from a year earlier but missed estimates.

Video-editing tool maker Pinnacle Systems (PCLE: down $4.67 to $7.82, Research, Estimates) was pummeled after it missed estimates and was downgraded by J.P. Morgan and USB Piper Jaffray.

Despite these weak reports, "more than two-thirds of the S&P 500 have reported earnings, and most of them have been pretty positive," Sethi added. "But in the short term, people are holding back a little, looking for a pickup in the economic data."

The mild selling Wednesday likely was some profit taking, not surprising after the kind of run markets have had this year, he added.

Market breadth was negative and weak. On the New York Stock Exchange, decliners edged advancers as almost 1.36 billion shares traded. On the Nasdaq, losers topped winners by more than 9 to 7 as almost 1.50 billion shares changed hands.

Treasury prices rallied, sending the 10-year note yield down to 4.31 percent from 4.44 percent late Tuesday. The move was a reversal of Tuesday's steep selloff, when the 10-year yield rose to a one-year high.

The dollar slipped against the yen and edged up versus the euro.

NYMEX light crude oil futures added 44 cents to $30.68 a barrel. COMEX gold settled at $358.10 an ounce, shedding $5.50 during the session.