Stocks pare losses

NEW YORK (CNNMoney.com) -- Stocks ended lower for the second straight session Thursday as record high oil prices in addition to lackluster earnings and economic reports fueled investors' nervousness about the direction of the economy.

The 30-share Dow Jones industrial average (Charts) and the broader S&P 500 index (Charts) fell about 0.1 percent.

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The tech-heavy Nasdaq (Charts) sank 0.9 percent.

The latest economic numbers took a toll on stocks from the outset, while record high oil prices slammed stocks later in the session. But all three major gauges pared losses just before the closing bell.

Before the bell, the government said orders for durable goods fell unexpectedly by 1.7 percent in September. Analysts were looking for a gain of 1.5 percent, according to economists surveyed by Briefing.com. August orders were also revised lower.

In a separate report, the government said the number of jobless claims last week fell by 8,000 to 331,000, which was a smaller drop than expected.

Then at 10 a.m. new home sales came in slightly weaker than expected, although they showed an uptick from an August reading that represented an 11-year low.

"What we have is a nervous, jittery market," according to Fred Dickson, chief market analyst at D.A. Davidson & Co.

Stock traders who are expecting the Federal Reserve to cut interest rates again when it meets next week are anxiously reacting to each piece of news, he added.

"It's difficult for investors to get excited about putting money to work."

Meanwhile, a rally in crude prices also weighed on investors during the session.

Oil prices jumped $3.36 to $90.46 a barrel, notching a new closing high on the New York Mercantile Exchange after Lebanese troops fired on Israeli warplanes and Turkey continued shelling Kurdish positions in Northern Iraq, raising fears of a broader conflict in the Middle East.

After the closing bell, Microsoft (Charts, Fortune 500) reported quarterly earnings Thursday that beat analysts' estimates, sending shares of the company up 5 percent on Inet.

The Dow component also said it was making a $240 million investment in social networking site Facebook, beating out rivals Google and Yahoo and plans to expand its advertising deal with the site.

Shares of Vonage Holdings (Charts) soared about 75 percent on Inet after the Internet-based phone service provider said it settled a patent lawsuit brought by Verizon Communications (Charts, Fortune 500) for a maximum of $120 million.

Also after the closing bell, Bank of America (Charts, Fortune 500) said it is exiting the wholesale mortgage business and cutting about 700 jobs. Shares fell 1 percent in extended trade.

In other earnings news, Sony (Charts) soared close to 7 percent after it posted a profit, thanks to strong sales of electronics.

No. 1 cable operator Comcast (Charts) reported earnings that met forecasts, but the company lowered its free cash-flow guidance for the year, sending shares down 11 percent.

Cell phone-maker Motorola (Charts, Fortune 500) reported a plunge in earnings that was a penny a share worse than forecast.

Raytheon (Charts, Fortune 500) also posted a lower third-quarter profit, sending shares of the defense contractor down slightly.

And shares of Dow Chemical (Charts, Fortune 500) fell nearly 1 percent after the nation's No. 1 chemical company saw a bigger-than-forecast drop in earnings, excluding special items.

Market breadth was negative. Losers edged out winners on the New York Stock Exchange, while decliners topped advancers by a margin of 3 to 2 on the Nasdaq.

Treasury prices ended little changed after an erratic session on Wall Street.

In currency trading, the dollar fell against the euro and yen.

Comex gold rose $5.40 to $771 an ounce.