Stocks struggle near records

NEW YORK (CNNMoney.com) -- Stocks turn mixed Thursday morning, giving up earlier gains, as investors welcomed the upbeat economic news, but bet that it means the Federal Reserve is less likely to cut interest rates anytime soon.

The Dow Jones industrial average (up 2.27 to 13,527.92, Charts) added a few points more than 90 minutes into the session, after touching a fresh intraday record of 13,624.31 earlier.

The S&P 500 index (down 3.72 to 1,518.56, Charts) lost a few points, after having risen 0.4 percent in the morning. The broad index remains within reach of its all-time closing high of 1,527.46, hit on March 24, 2000, near the end of the last big bull run that was sparked by the 1990s tech boom.

The tech-fueled Nasdaq composite (down 13.67 to 2,563.38, Charts) lost 0.4 percent, after having risen in the morning. The Nasdaq is not far from a six-year high.

Stocks slipped Wednesday as investors showed some caution after the Dow industrials and S&P 500 index briefly touched record territory. Stocks were also burdened by comments from ex-Federal Reserve chair Alan Greenspan, who said he's worried about another dramatic correction in Chinese stocks following the recent run.

These factors remained in place Thursday, but were tempered by the strong economic news.

Durable goods orders rose a smaller-than-expected 0.6 percent in April, however, the previous month's reading was revised higher. Additionally, the report's business spending component advanced 1.2 percent, showing a positive trend.

New home sales rose to a 981,000 annual rate in April, topping forecasts and rising from the previous month. The rise was mostly fueled by a big drop in home prices.

Stocks initially jumped on the reports, particularly the housing market report, as investors breathed a sigh of relief that the economy seems to be holding up. However, if the economy is doing better, there's even less of a reason for the Federal Reserve to need to cut interest rates by the end of the year, as some have hoped.

That realization seemed to cut into any stock gains.

Treasury prices slipped on the housing report, raising the yield on the 10-year note to 4.89 percent from 4.85 percent late Wednesday. Treasury prices and yields move in opposite directions.

In currency trading, the dollar rose versus the euro and was little changed versus the yen.

Among stock movers, Network Appliance (down $5.27 to $32.79, Charts) slumped 13 percent in active Nasdaq trade after warning late Wednesday that first-quarter sales and earnings won't meet estimates. The maker of computer network storage systems also reported higher quarterly earnings that met estimates on higher revenue that topped estimates.

Computer Associates (down $1.92 to $25.92, Charts) slipped 6 percent after warning late Wednesday that fiscal 2008 sales and earnings won't meet forecasts. The management software developer also reported a narrower fourth-quarter loss that was in line with forecasts.

Intel (down $0.31 to $22.36, Charts, Fortune 500), Advanced Micro Devices (down $0.25 to $14.96, Charts, Fortune 500) and Qualcomm (down $1.10 to $43.74, Charts, Fortune 500) were among the heavily-traded tech stocks dragging on the broader market.

Market breadth was negative. On the New York Stock Exchange, losers beat winners three to two on volume of 540 million shares. On the Nasdaq, decliners topped advancers three to two as 770 million shares traded hands.

U.S. light crude oil for July delivery fell 47 cents to $65.30 a barrel on the New York Mercantile Exchange.

COMEX gold for June delivery fell $3 to $659.60 an ounce.