NEW YORK (CNN/Money) -
Blue-chip stocks stumbled for the second straight session Thursday, burdened by rising oil prices and weakness in Exxon Mobil, among other issues.
Techs were little changed after Wednesday's sell-off.
The Dow Jones industrial average (down 70.28 to 10,038.90, Charts) slumped 0.7 percent. On Wednesday, the Dow registered its biggest one-day point drop in nearly seven weeks.
The Standard & Poor's 500 (down 5.20 to 1,108.36, Charts) index lost nearly 0.5 percent. The Nasdaq composite (up 0.72 to 1,886.43, Charts) ended barely changed.
Worries about corporate earnings and oil prices had sent stocks reeling Wednesday. There was little in Thursday's corporate or economic news to temper such concerns.
"One of the main drivers for the Dow and S&P has been the price of oil; that's been dragging on the companies that are especially dependent on lower oil prices," said Art Hogan, chief market analyst at Jefferies & Co.
"Happily, we've been getting more good news than bad news from tech lately, and that's helping the Nasdaq somewhat," he added.
After the close of trade Thursday, the U.S. Department of Energy confirmed that it will soon provide limited crude oil loans from the Strategic Petroleum Reserve as a means of combating shortages created by Hurricane Ivan.
The news was not a big surprise to traders. Reports earlier in the day -- citing unnamed sources -- said that loans were en route.
Following the after-hours confirmation, U.S. light crude for November delivery fell 26 cents to $48.20 a barrel in electronic trading.
U.S. oil prices had closed the regular session on the New York Mercantile Exchange at $48.46 a barrel, a gain of 11 cents, after briefly hitting $49 in the afternoon.
Also after the close, chip gear maker Applied Micro Circuits (AMCC: up $0.02 to $3.33, Research, Estimates) joined the parade of chip sector companies warning that current-quarter results won't meet expectations. Shares were little changed in after-hours trade.
No earnings are expected Friday. Reports on durable goods orders and existing home sales are expected.
Due before the open, orders for durable goods likely fell 0.3 percent in August, according to Briefing.com estimates, after rising 1.6 percent in July.
Due around 30 minutes after the start of trading, existing home sales likely fell to a 6.65 million-unit annual rate in August, from a 6.72 million-unit annual rate in July.
What moved?
Exxon Mobil led a number of oil stocks declining. Deutsche Bank Securities downgraded the global oil sector; it also cut its ratings on Exxon to "hold" from "buy." Exxon (XOM: down $1.10 to $47.76, Research, Estimates) stock lost 2.2 percent and was the Dow's biggest decliner.
Boeing (BA: down $0.68 to $53.00, Research, Estimates) shares fell around 1.3 percent. White House officials have requested that the Justice Department determine whether Air Force Secretary James Roche engaged in misconduct involving a proposal to lease 100 Boeing refueling tankers.
Separately, Boeing said that it has received down payments for up to 200 of its new 707 planes.
In addition to Exxon and Boeing, other Dow 30 decliners included 3M (MMM: down $1.53 to $78.70, Research, Estimates), SBC Communications (SBC: down $0.32 to $26.04, Research, Estimates) and United Technologies (UTX: down $1.17 to $92.54, Research, Estimates).
Fannie Mae (FNM: down $3.54 to $67.15, Research, Estimates) slipped for a second session. On Wednesday, regulators charged that the mortgage lender had used improper accounting to manipulate earnings. The charges were part of a probe that began more than a year ago.
On Thursday, Wachovia downgraded the stock to "market perform" from "outperform."
On the upside, shares of Martha Stewart Living Omnimedia (MSO: up $2.57 to $17.55, Research, Estimates) rallied more than 17 percent on news that its founder will team up with reality television maven Mark Burnett, after completion of her prison sentence, to create new programs.
Stewart is expected to begin serving a five-month sentence in October, followed by house arrest, after being convicted of lying about her sale of ImClone (IMCL: down $0.75 to $54.16, Research, Estimates) stock.
Market breadth was negative. On the New York Stock Exchange, losers edged winners eight to seven as nearly 1.28 billion shares changed hands. On the Nasdaq, decliners beat advancers by the same margin on volume of 1.39 billion shares.
"The market is trying to consolidate around present levels, all the while keeping an eye on the price of oil," said Peter Cardillo, chief market analyst at S.W. Bach & Co.
Jobless claims rise, LEI dip
Approximately 350,000 Americans filed new claims for unemployment last week, according to a Labor Department report released before the open. That was up from an upwardly revised 336,000 new claims the previous week but still below the closely watched 400,000 level. Economists surveyed by Briefing.com were expecting 338,000 new claims.
The Conference Board's index of leading indicators fell 0.3 percent in August, after falling 0.3 percent in July. Economists surveyed by Briefing.com thought it would fall 0.2 percent.
"The economic news this morning was mixed," Cardillo added. "The leading indicators fell for the third straight month, which is certainly not a positive, but the decline was minimal."
COMEX gold added $3.60 to settle at $412.60 an ounce.
Treasury prices slipped, retreating from their recent rally. The yield on the 10-year note rose to 4.02 percent from 3.98 percent late Wednesday. Treasury prices and yields move in opposite directions.
The yield fell below 4 percent Wednesday for the first time since April.
In currency trading, the dollar fell versus the euro and yen.
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