Stocks Lose Momentum

Blue-chip stocks clung to modest gains but the broader market and the tech-laced Nasdaq slipped Thursday as investors weighed good news from Hewlett-Packard and positive economic data against worries about corporate accounting.

The blue-chip Dow Jones Industrial average edged up 12.87 points, or 0.13 percent, to 10,002.54, based on the latest available numbers. The broad Standard & Poor's 500 index shed 2.08 points, or 0.19 percent, to 1,116.43. The technology-packed Nasdaq composite index dropped 15.97 points, or 0.86 percent, to 1,843.19.

"There are some bargains in the market and we are seeing investors stepping into the market and buying -- but they are only testing the market with their toe," said George Rodriguez, senior vice president of equities at Guzman & Co., explaining that the mood on Wall Street remains cautious.

Conglomerate Tyco International Ltd., telecommunications service provider Qwest Communications International Inc. and data-storage company EMC Corp. slumped as accounting concerns still gnawed at the market.

A drop in weekly jobless claims and a report showing business inventories fell for an 11th straight month lured investors -- still troubled over the reliability of corporate financial statements -- into buying stocks.

"The number that did it today was the jobless claims number. That's been declining rather consistently for the last month or two," said Hugh Johnson, chief investment officer at First Albany Asset Management. "That means ... the job losses are coming to an end and we'll start to see job gains as we start to move into the spring.,

Stocks rallied a day ago after a report showed U.S. retail sales in January, minus cars, snagged their biggest gain since March 2000.

Enron's internal whistleblower Sherron Watkins told her tale to Congress in the early afternoon as hearings on the bankrupt energy trader's collapse resumed -- minus its ex-chairman, Kenneth Lay. A House of Representatives panel on Wednesday evening unexpectedly canceled a Thursday hearing where Lay was to have appeared under subpoena, but was expected to refuse to testify.

Tyco fell $2.21 to $26.69. The conglomerate on Wednesday warned its quarterly earnings could fall below most Wall Street estimates on higher borrowing costs and business disruptions from nagging questions about its accounting methods.

Qwest, the most active share on the New York Stock Exchange, slumped 90 cents to $7.69 after dropping a day ago. It drew down $1 billion from a $4 billion back-up line of credit because it had difficulty finding buyers for short-term debt known as commercial paper, sources said.

The company said on Wednesday it accounted for its obligations to another telecom firm in accordance with generally accepted accounting principles. It was responding to a newspaper article that noted the transactions could be seen as off-balance-sheet deals, which have drawn scrutiny after the collapse of Enron.

EMC lost 64 cents to $13.85 as the No. 1 maker of data storage systems was buffeted by concerns that it improperly booked revenue with some customers.

Juniper Networks Inc., the Nasdaq's most active stock, fell $1.96 to $11.05, while rival Cisco Systems Inc. dipped 9 cents to $17.43. Cisco, the world's No. 1 maker of gear used to manage Internet traffic, extended its share of the market during the fourth quarter over Juniper, according to a report from research firm Dell'Oro Group.

Computer and printer giant Hewlett-Packard Co. slipped 4 cents to $20.94. The Dow component posted quarterly profits above already boosted expectations as consumers snapped up personal computers and printers. H-P, however, tempered expectations for the current quarter, saying consumer spending could slow and earnings would dip.

Advancing issues led decliners 4 to 3 on the New York Stock Exchange. More than 808 million shares changed hands on the Big Board, and more than 1.1 billion on Nasdaq.

The Russell 2000 index slipped 0.22 to 476.11.

Overseas, Japan's Nikkei stock average advanced 1.1 percent. In Europe, Germany's DAX index rose 0.6 percent, Britain's FT-SE 100 climbed 1.1 percent, and France's CAC-40 gained 1.5 percent.

Reuters and the Associated Press contributed to this report.