After rally, a retreat

NEW YORK (CNNMoney.com) -- Stocks slipped Thursday morning, retreating one session after the Dow industrials index hit its highest close ever, as investors mulled Apple's options woes, rising Treasury bond yields and a trio of upbeat economic reports.

The Dow Jones industrial average (down 16.98 to 12,493.59, Charts) lost a few points over an hour into the session, after ending the previous session at its highest point ever, above 12,500.

The broader S&P 500 (down 2.38 to 1,424.46, Charts) index lost 0.2 percent.

The Nasdaq (down 5.57 to 2,425.65, Charts) composite lost 0.3 percent, pressured by Apple Computer.

Stocks rose in the first two days of the holiday-shortened trading week, but the tone was less upbeat Thursday morning.

In addition to Apple and a modest uptick in oil prices, investors also eyed a trio of bullish economic reports. The strong readings on the economy caused worries that the Federal Reserve may not cut interest rates as soon as has been hoped.

A trade report showed that the pace of existing home sales picked up in November from the previous month, although the median price dropped from a year ago. (Full story).

Consumer confidence rebounded in December beyond economists' forecasts, the Conference Board said.

And the Chicago PMI, a regional read on manufacturing, rose more than expected in December.

Treasury prices slumped on the economic news, raising the yield on the benchmark 10-year note to 4.70 percent from 4.65 percent late Wednesday. Bond prices and yields move in opposite directions.

U.S. light crude oil for February delivery fell 24 cents to $60.10 a barrel on the New York Mercantile Exchange. The price of oil fluctuated after the weekly energy inventory report showed a big decline in oil reserves and a large rise in gasoline stockpiles.

Apple Computer continued to slide amid ongoing concerns about its options practices, under federal investigation. In the latest news, the company allegedly gave CEO Steve Jobs 7.5 million stock options in 2001 without the approval of the board. (Full story).

Apple (down $1.08 to $80.44, Charts) shares fell 1.5 percent Thursday morning.

Market breadth was negative and volume was moderate. On the New York Stock Exchange, losers beat winners 8 to 7 on volume of 220 million shares. On the Nasdaq, decliners topped advancers nine to five as 480 million shares changed hands.

Investors also eyed a report showing that the number of Americans filing new claims for unemployment rose a smaller-than-expected amount last week.

Stocks remain in a seasonally strong time of year. The combination of the last five trading days of a year and the first two of the new year has been good for an average gain of 1.6 percent on the S&P 500 since 1969, according to the Stock Trader's Almanac. Going back to 1950, that period has been good for a gain of 1.5 percent.

In global trade, Asian markets ended higher and European markets were mixed at midday.

COMEX gold rose $4.20 to $634.50. The rise in gold also boosted the underlying stocks, with the Amex Gold Bugs (up $3.03 to $340.23, Charts) index adding 1 percent.

10 big ideas for 2007

More on the markets

More on investing