Updated from 4:15 p.m. EST

Stocks continued their seesaw act Thursday, falling moderately as investors dealt with weak retail sales data, higher oil prices and large moves in the bond market.

The Dow Jones Industrial Average fell 28.02 points, or 0.25%, to 11,025.51, while the S&P 500 lost 2.10 points, or 0.16%, at 1289.14. The Nasdaq Composite slipped 3.53 points, or 0.15%, to 2311.11.

"Today was a retail-driven, disappointing day," said Jay Suskind, head of institutional equity trading with Ryan Beck & Co. "The bond market and higher oil prices also gave us problems. Investors were nervous."

The Nasdaq recovered from session lows thanks a late rise in the Philadelphia Semiconductor Sector index, which finished up 0.1%. The index was down as much as 0.7% but rebounded with help from component Advanced Micro Devices ( AMD), which added 3.1%.

About 1.79 billion shares changed hands on the New York Stock Exchange, with decliners beating advancers by a 9-to-7 margin. Volume on the Nasdaq was 2.06 billion, with decliners outpacing advancers 3 to 2.

The 10-year Treasury bond was down 12/32 in price to yield 4.63%, putting it 9 points below the yield on the two-year note, a relatively narrow spread. The dollar rose against the yen and weakened in trading with the euro.

"The flattening move of the curve has been accelerating," said John Canavan, market analyst with Stone & McCarthy Research Associates. "There was some substantial buying of the new 30-year bond and now we're seeing a reversal of that as recent interest has waned. This has caused a quick reversal of the inversion."

Major stock averages have been subject to wide swings this week, ending stronger Monday, plunging the next day and then rising by 0.6% to 1% on Wednesday as semiconductor stocks led a tech rally. Tuesday's selloff came after Google's ( GOOG) growth fumble. On Thursday, Google rose 3.2% after CEO Eric Schmidt told analysts he sees tremendous headroom to make the most of the company's profits.

"While we would like to see a follow-through day, the positive implications from yesterday's rally should help reinforce a support under the market at Tuesday's intraday lows," said Marc Pado, market strategist with Cantor Fitzgerald. "Weakness in same-store retail sales and continued strength in crude will represent the first obstacles for the bulls today."

Oil was higher Thursday as European diplomats prepared to meet with top Iranian officials to discuss the country's nuclear ambitions. Concerns that Iran's renascent atomic research is a prelude to weapons production has repeatedly spooked energy markets over the last two months. April crude rose $1.39 to finish at $63.36 a barrel, its highest close since Feb. 9.

Natural gas was higher after the Energy Department said inventory levels fell by 171 billion cubic feet last week. Natural gas finished up 3 cents to $6.76 per million British thermal units.

To view Gregg Greenberg's video take on today's market, click here .

Investors received further insight into the state of the U.S. consumer as the nation's department and specialty stores reported sales figures for February on Thursday.

The world's biggest retailer, Wal-Mart ( WMT), said same-store sales rose 3.2% in February, ahead of expectations. In March, Wal-Mart expects same-store sales to rise in a range of 1% to 3%, which the retailer blames on a later Easter. Shares closed down 9 cents, or 0.2%, to $45.06.

Meanwhile, rival Target ( TGT) posted a 3.6% increase in same-store sales for February, while Kohl's ( KSS) notched a 3.4% rise. Federated ( FD) said same-store sales were up 1% for the month, beating estimates of a 1% decline.

Other winners included Costco ( COST), which said comparable-store sales rose a better-than-expected 8% last month from a year earlier, while Jos. A. Banks ( JOSB) reported a 3.3% rise.

Among retail losers were Pier 1 Imports ( PIR), which saw same-store sales fall 10.8% in February, and Gap ( GPS), with sales declining 11%. Talbots ( TLB) also missed estimates after it posted a 6% decline in same-store sales.

Late Wednesday, teen favorites Aeropostale ( ARO) and Hot Topic ( HOTT) both reported lower same-store results for February, while "extreme" sports outfitter Zumiez ( ZUMZ) posted a 28% surge.

After the bell Wednesday, specialty retailer Chico's ( CHS) posted fourth-quarter earnings of $44 million, or 24 cents a share, up from a profit of $33 million, or 18 cents a share, a year earlier. Results missed the Thomson First Call average consensus by a penny. Chico's dropped $6.40, or 13.4%, to $41.36.

Also Wednesday, homebuilder Hovnanian ( HOV) reported first-quarter earnings of $81.4 million, or $1.25 a share, about the same as a year ago. The results were a penny ahead of estimates. Hovnanian rose 29 cents, or 0.6%, to close at $46.42.

Reports in The New York Times and Financial Times Thursday say Yahoo! ( YHOO) is scaling back its ambitions in the area of Internet television. The papers quoted media chief Lloyd Braun saying the company will focus on acquiring programs from other content producers and de-emphasize in-house development. Yahoo! slid by 48 cents, or 1.5%, to $31.70.

On the economic front, the Labor Department said that initial jobless claims rose by 15,000 to 294,000 for the week ended Feb. 25. The less volatile four-week moving average increased by 5,250 to 287,250.

Overseas markets were mixed, with London's FTSE 100 down 0.5% to 5815 and Germany's Xetra DAX adding 1.2% to 5867. The moves came after the European Central Bank raised its benchmark interest rate to 2.50% from 2.25%, the second hike in three months, and lifted its forecast for economic growth. In Asia, Japan's Nikkei fell 0.3% to 15,910, while Hong Kong's Hang Seng added 0.4% to 15,882.

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