Stocks fizzle after the Fourth

NEW YORK (CNNMoney.com) -- Stocks got off to a slow start Thursday as investors digested higher oil prices and the latest deal news ahead of the government's closely watched employment report.

The Dow Jones industrial average (down 37.23 to 13,540.07, Charts) was down 0.1 percent. The Nasdaq composite index (down 1.26 to 2,643.69, Charts) rose 3 points. The Standard & Poor's 500 index (down 1.37 to 1,523.50, Charts) hovered near breakeven.

All three major gauges were higher Monday and Tuesday, ahead of the July 4 holiday. Financial markets were closed Wednesday for Independence Day.

The latest deal news came late Tuesday, when private equity firm Blackstone Group (up $0.93 to $30.65, Charts) said it was buying Hilton Hotels (up $9.56 to $45.61, Charts, Fortune 500) in a deal valued at $26 billion.

Jones Apparel Group (up $0.67 to $29.07, Charts, Fortune 500) said it received an unsolicited bid from Fast Retailing Co. (Charts) to acquire Barneys New York (Charts) for $900 million.

Coca-Cola (down $0.05 to $52.85, Charts, Fortune 500) said Wednesday it is evaluating whether to make a bid for Snapple, the iced tea division owned by British drinks company Cadbury Schweppes (up $0.54 to $54.34, Charts).

In other corporate news, Kohlberg Kravis Roberts announced plans late Tuesday for a $1.25 billion initial public offering. The filing disclosed the high-profile firm has $53.4 billion in assets under management and earned $1.11 billion in 2006.

General Motors (down $1.68 to $36.31, Charts, Fortune 500) was downgraded by Bear Stearns after the automaker reported a 21 percent drop in U.S. sales in June. The sales report, which came after the close of trading Tuesday, was much weaker than forecast.

On the economic front, the number of initial claims for jobless aid filed last week increased by 2,000, according to the Labor Department. The report on ISM services was due at 10 am, but investors will be paying more attention to the closely watched June jobs report slated for Friday.

Treasury prices fell in early trading, taking the yield on the 10-year note to 5.09 percent from 5.04 percent late Tuesday before the U.S. holiday.

The dollar was lower against the euro but higher versus the yen.

Oil prices gained in early trading ahead of the 10:30 a.m. ET report on U.S. fuel inventories. U.S. light crude rose 74 cents to $72.15 a barrel in electronic trading.

In global markets, European stocks traded in choppy fashion ahead of interest rate decisions from the Bank of England and European Central Bank. The BOE is widely expected to raise rates, while the ECB is expected to leave them unchanged.

Chinese stocks tumbled more than 5 percent on concerns about a flood of new shares, but other Asian markets ended the session higher.