NEW YORK ( TheStreet) - Stocks pulled back Thursday after a higher-than-expected rise in jobless claims slowed early earnings season momentum. The Dow Jones Industrial Average was down by 23 points, or 0.2%, to finish at 11,732 for its first drop in three days. The S&P 500 was off by 2 points or 0.2%, to close at 1284, and the Nasdaq Composite fell 2 points, or 0.07%, to settle at 2,735. DuPont ( DD), Home Depot ( HD), and Caterpillar ( CAT) were among the biggest percentage gainers in the Dow. Intel ( INTC) said after the bell Thursday that adjusted profits rose to 59 cents per share, up from 55 cents a year earlier. Analysts were expecting an EPS of53 cents. The tech bellwether also issued a positive outlook for 2011. Shares were modestly higher in aftermarket trades. Merck ( MRK) was the worst performer among the blue chips, dragging other healthcare stocks lower. Shares shed more than 6% after the company announced changes to clinical studies of vorapaxar, one of its investigational cardiovascular medicines. Merck said it would end one study of the drug and the drug's use would be reduced in a separate study. Alcoa ( AA) was also weak, sliding more than 3%. Sixteen of the Dow's 30 components finished lower. Volume on the New York Stock Exchange was around 934 million, while the Nasdaq saw 1.94 billion shares changing hands. Breadth was negative on both exchanges with losers outpacing winners 1623 to 1361 on the Big Board and 1448 to 1136 on the Nasdaq. The Labor Department said initial weekly jobless claims rose by a higher-than-expected 35,000 to 445,000 in the week ended Jan. 8, from 410,000, previously.
John Canally, economist at LPL Financial, said the initial claims data often tends to be wonky during the first weeks of the year, as holidays tend to disrupt data collection, one reason why the market was not too alarmed at the report. "There is a chance it job market could have deteriorated in the last week, but it's hard to get a clean read at this time of the year. I would have been just as skeptical if the claims had fallen to 350,000," said Canally."Overall the trend is down. Household employment data shows there is not a lot of firing but not more hiring."