US stocks ease on lackluster economic data

NEW YORK (AP) — Stocks fell slightly in morning trading Thursday after a batch of economic reports showed that growth remains tepid even as companies report strong earnings.

The Dow Jones industrial average fell 7.41, or 0.3 percent, to 10,359.31. The Standard & Poor’s 500 index fell 2.56, or 0.2 percent, to 1,092.61, while the Nasdaq composite index fell 7.11, or 0.3 percent, to 2,242.73.

A regional manufacturing index in New York plummeted this month, while a national report showed modest growth in industrial output. The government also reported that first-time claims for unemployment benefits fell, but that was largely because of seasonal factors.

JPMorgan Chase & Co. was the latest company to report big profits, following Intel Corp. and Alcoa Inc. earlier in the week. The bank also cut down its loan-loss reserves, which could be a sign that mortgage and loan defaults are moderating.

However, JPMorgan’s CEO Jamie Dimon still struck a cautious tone about future economic growth.

“Earnings are strong,” said Sandy Mehta, principal and chief investment officer of Value Investment Principals. “But the underlying economy is not as strong.”

Mehta said investors are readjusting their views for future economic growth after being disappointed by economic reports in May and June.

“There was too much pessimism,” Mehta said. With traders recalibrating their expectations for the economy, strong earnings could be the biggest factor in deciding stock movements in the coming months, he said.

Upbeat earnings over the past two days have helped markets avoid big dips, even after the Federal Reserve cut its forecast for future economic growth Wednesday.

JPMorgan Chase shares dipped 20 cents to $40.15.

Initial jobless claims fell by 29,000 to a seasonally adjusted 429,000, the lowest level since August 2008.