NEW YORK (CNN/Money) - Stocks finished lower Thursday, after languishing throughout the session, as investors decided to cash in their gains from the market's recent rally.

The tech-heavy Nasdaq composite (Charts), hurt by a big drop in Amazon.com and Starbucks, slid 0.8 percent.

The broader Standard & Poor's 500 index (down 3.30 to 1,189.89, Charts) lost some 0.3 percent, but the Dow Jones industrial average (down 3.69 to 10,593.10, Charts) finished little changed.

"Nothing happened in the markets today," joked Art Hogan, chief market strategist at Jefferies & Co. "We opened at 9:30 am and we closed at 4 p.m."

Hogan said that Thursday's economic news was mostly positive and that there was some optimism in the markets ahead of Friday's payrolls report, but that Amazon.com proved to be a powerful opposing force.

Ram Kolluri, president and chief investment officer at Global Value Investors, offered a more guarded reading of the session's economic news.

"The economy is growing reasonably well, but it is sending all kinds of mixed signals," Kolluri said, noting that the Institute for Supply Management non-manufacturing index came in weaker-than-expected. "The market doesn't like the two steps forward one step backward."

In economic news, the ISM service report showed growth in the domestic services sector fell to 59.2 in January from a revised 63.9 in December. Analysts, on average, expected that number to come in at 61.3. Any number above 50 signifies growth in the sector, which comprises about three-quarters of the economy.

The Commerce Department said factory orders rose 0.3 percent in December, missing consensus estimates, and the Labor Department reported that fourth-quarter productivity only rose 0.8 percent, its slimmest gain in four years.

Meanwhile, initial jobless claims unexpectedly dipped to 316,000 last week from 325,000 the previous. Economists had predicted that claims would rise to 330,000.

Friday's payrolls report, however, may provide more insight on what's going on with the economy. Analysts are looking for a 200,000 payrolls increase following a 157,000 gain in December.

The Nasdaq took a heavy hit as Amazon.com (down $6.13 to $35.75, Research) shares plunged 14.6 percent after the online retailer missed analysts' fourth-quarter earnings expectations.

And Starbucks (down $4.43 to $49.57, Research), another Nasdaq stock, posted a narrower-than-expected rise in January same-store sales late Wednesday, knocking the coffee chain's stock 8 percent lower.

Speculation that MCI (Research) and Qwest (up $0.20 to $4.40, Research) are in talks that could lead to a merger lifted their shares 2.4 percent and 4.8 percent, respectively. Telecom companies are apparently eyeing deals after SBC (up $0.23 to $24.62, Research) agreed this week to buy AT&T (up $0.15 to $19.75, Research).

No. 3 telecom equipment maker Alcatel (down $1.83 to $12.42, Research) tumbled nearly 13 percent after missing its fourth-quarter profit forecast. The French firm cited weak performance in key emerging markets, but reiterated its commitment to expanding its presence.

A handful of rival stocks fell in sympathy. Juniper Networks (down $1.17 to $23.30, Research) slid 4.8 percent, Cisco (down $0.63 to $17.52, Research) gave up 3.5 percent, Siemens (down $2.21 to $77.28, Research) lost 2.8 percent, and Lucent (Research) pulled back 2.5 percent.

Lehman Brothers raised its rating on Hewlett-Packard (up $0.33 to $19.90, Research) to "overweight" from "equal-weight," boosting the computer maker's stock 1.7 percent.

CNET Networks (down $1.64 to $9.81, Research) posted strong fourth-quarter profit late Wednesday, but investors were disappointed as the tech-news service said current-quarter revenue would miss consensus estimates. Its shares sank nearly 14.3 percent.

Medical-equipment maker Cyberonics (up $11.53 to $39.01, Research) was one of the Nasdaq's leading gainers, surging 42 percent on news that it has won conditional FDA approval to market an implantable device for chronic depression. Lazard Freres and Piper Jaffray raised their ratings on the stock following the report.

Market breadth was negative. On the New York Stock Exchange, losers trounced winners roughly 8-to-7 as 1.55 billion shares changed hands. On the Nasdaq, decliners trumped advancers by 3-to-2 on volume of 1.98 billion shares.

Oil prices fell in afternoon trading. The March light crude contract lost 29 cents to $46.40 a barrel on the New York Mercantile Exchange, while Brent crude fell 23 cents to $43.85.

Bond prices edged lower, pushing the yield on the 10-year Treasury note to 4.16 percent from 4.14 percent late Wednesday. Bond prices and yields move in opposite directions.

In currency trading, the dollar edged higher against the yen and the euro.

COMEX gold lost $4.50 to $418.50 an ounce.

Asian-Pacific bourses ended mixed Thursday, with Tokyo's Nikkei closing slightly lower. European indexes finished lower as well. (Click here for more on world markets.)