Stocks slip despite strong earnings

NEW YORK(AP)�Stocks in the U.S. fell Thursday as investors weighed stronger corporate earnings against disappointing economic reports.

The Dow Jones industrial average fell 69 points to 12,964. The Standard & Poor's 500 index dropped 8 points to 1,377. The Nasdaq composite index fell 24 points to 3,008.

Morgan Stanley (MS) rose 2% after the bank trounced Wall Street's earnings and revenue estimates. UnitedHealth Group (UNH) rose 2.6% after reporting higher profits. EBay, Southwest Airlines and Bank of America also beat forecasts.

Stock indexes initially fell after two relatively weak economic reports came out at mid-morning. An index of regional manufacturing compiled by the Philadelphia branch of the Federal Reserve dropped sharply, and the National Association of Realtors said home sales fell 2.6% last month.

Earlier, the Labor Department said applications for unemployment benefits dipped 2,000 to 386,000. When the number is above 375,000, investors take it as a sign that hiring isn't strong enough to lower the unemployment rate.

"None of these (reports) were disastrous, but they're not as strong as we like to see," said Brian Lazorishak, a portfolio manager at Chase Investment Counsel in Charlottesville, Va. Still, he added, "We've had good numbers out of some companies, so maybe we have some room for upside here."

Gold and U.S. Treasury prices rose. The yield on the 10-year Treasury note fell to 1.97% from 1.98% late Wednesday.

On Wednesday, U.S. stocks fell on worries that European efforts to help governments there pay off their debt could hit new roadblocks. The Bank of Spain had reported that bad loans at the country's banks had hit an 18-year high.

Before the opening bell Thursday, investors were nervously watching a sale of new Spanish government bonds. The auction met with high demand, and more bonds were sold than expected. But yields rose anyway. The yield on Spanish 10-year notes rose to 5.88%, an increase of less than a tenth of a percentage point.

European markets mostly fell. Spain's IBEX index fell 1.9%, Greece's main index 1.8% and France's CAC-40 fell 1.3%.

In other corporate news, Tumi Holdings, a maker of high-end luggage, jumped 55% to $27.88 on its first day of trading.

The U.S.-listed shares of cell phone maker Nokia (NOK) sank 3.3% after the Finnish company reported a loss for the first three months of the year and a 40% plunge in device sales. The company faces fierce competition from Apple's iPhone and handset makers that use Google's Android software.

Human Genome Sciences (HGSI) doubled to $14.20 after the company spurned a takeover offer from GlaxoSmithKline of $13 per share, saying it undervalues the company. The biotech drug maker, which produces the lupus treatment Benlysta, said it would consider other options including a sale of the company.