Tech Buoys Nasdaq, But Earnings Curb Dow And S&P 500

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U.S. stocks edged higher on Thursday, rebounding off earlier weakness as strength in technology companies, especially Facebook, lifted the Nasdaq.

* Caterpillar weighs on Dow, extending recent selloff

* Facebook's best daily percentage gain boosts Nasdaq

* China's growth a concern as manufacturing weakens

* U.S. jobless claims rise modestly in latest week

* Dow flat, S&P 500 up 0.1 pct, Nasdaq up 0.5 pct

U.S. stocks edged higher on Thursday, rebounding off earlier weakness as strength in technology companies, especially Facebook, lifted the Nasdaq.

The Dow and the S&P 500 were held back by disappointing earnings in the cyclical sector. Concerns about China's growth also took a toll on investor sentiment.

Caterpillar Inc extended its steep drop in Wednesday's session, which came after the heavy machinery maker cut its 2013 earnings forecast. The stock slid 2 percent to $81.81 and ranked as the Dow's second-biggest percentage decliner.

Facebook Inc scored its biggest daily percentage gain ever - up as much as 28.3 percent at a session high of $34. In afternoon trading, the stock was up 27.3 percent at $33.74. Facebook topped the Nasdaq's list of most actively traded stocks a day after the online social network company reported a big jump in mobile advertising revenue.

General Motors and Dow Chemical reported profits that exceeded expectations, but that was not enough to give the broad stock market a major push into positive territory. GM's stock fell 0.8 percent to $36.83, after touching a two-hear high of $37.70. Dow Chemical rose 1.7 percent to $34.95.

Stocks have advanced steadily this year, with the S&P 500 up 18 percent in 2013, after hitting a number of record closing highs. For July, the benchmark index has gained 4.7 percent.

"It's positive that markets are holding in relatively well, given how strong the month has been," said Mitch Rubin, chief investment officer of RiverPark Advisors in New York. "To the extent that earnings continue to be strong, that helps to take off some of the perception that we've gone too far, too fast."

With 47 percent of the S&P 500 companies having reported earnings so far, about 68 percent have topped profit forecasts, above the historical average of 63 percent. About 56 percent have reported better-than-expected revenue, a rate that is under the historical average.

The Dow Jones industrial average was up 1.16 points, or 0.01 percent, at 15,543.40. The Standard & Poor's 500 Index was up 1.69 points, or 0.10 percent, at 1,687.63. The Nasdaq Composite Index was up 19.44 points, or 0.54 percent, at 3,599.04.

Increasing worries about slowing growth in China also made U.S. investors nervous. A major index of Chinese stocks suffered its second straight loss on Thursday despite measures from China's government to spur the economy, including help for exports and railway investment. Data on Wednesday showed manufacturing in China running at an 11-month low in July.

"Companies that are centered around macro issues like China are proving to be controversial bets right now, given all the fears out there," said Rubin, who helps oversee $2.1 billion.

Shares of manufacturer 3M Co, a Dow component, rose 0.2 percent to $116.59 after the company's results.

The tech sector, particularly online companies, provided a bright spot in Thursday's session.

TripAdvisor Inc jumped 16 percent to $70.92 a day after reporting a jump in quarterly profit and revenue from its travel website. The stock was the S&P 500's second-biggest percentage gainer in afternoon trading.

Weekly U.S. jobless claims rose to 343,000 in the latest week from 334,000 in the previous week. Analysts were looking for a read of 340,000.

New orders for durable goods rose 4.2 percent in June, far stronger than the 1.3 percent growth rate that had been forecast. Markets had little reaction to the data.

In Europe, shares fell as a raft of mixed results from blue chips and lingering concerns about the pace of growth in China triggered a bout of profit taking following recent sharp gains.

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