Retailer JC Penney Co. Inc. , whose earnings topped forecasts and which raised its outlook for the year, might also later boost sentiment.
Just as the market opened, Federal Reserve Chairman Ben Bernanke issued a stern speech on subprime mortgage markets and their impact on housing. However, he said the Fed didn't expect those problems to "significantly" affect the broader market.
The Dow industrials were down 26 points at 13,461, as 19 of its 30 components retreated.
Caterpillar Inc. led the way down for blue chips, losing 1.8% after Stifel Nicolaus downgraded the stock from a buy to a hold, citing "storm clouds for consumer spending that pressure economy-sensitive stocks."
Even Hewlett-Packard fell 0.7%. The computer maker reported lower fiscal second-quarter profit, but boosted sales by 13% and raised its full-year forecast.
Credit Suisse reiterated an outperform rating on the company. "We believe investors are not adequately rewarding HP for its superior growth and earnings profile, as such we would be buyers of the stock at this level," it said.
The Dow rallied to close at a new high Wednesday, leading investors to consolidate their gains early Thursay. Yet, periods of consolidation have been short-lived in a market rally that has continued with little interruption since mid-March.
"The bulls are clearly in control and standing in front of this freight train has caused shorts to race to cover at every new high," said Marc Pado, market strategist at Cantro Fitzgerald in a note.
The S&P 500 fell 3.8 points to 1,510, while the Nasdaq Composite slipped 5.6 points to 2.541.
Micron Technology weighed on tech shares, losing 2.9% after filing to sell $1.1 billion in convertible notes.
But tech shares might later get a boost from Sun Microsystems . Its shares rose 5% after it announced its board has authorized a buyback of up to $3 billion.
Stocks rallied Wednesday, sending the Dow to a new record high, as investors cheered stronger-than-expected industrial production data, Bausch & Lomb Inc.'s buyout by a private equity firm and speculation about a break-up of Citigroup Inc. .
The blue-chip average jumped 103 points to a new closing high.
"There is such a strong trend of taking stock private that investors are not only scrambling to find the next potential target, but are also looking for a place to put all of this liquidity to work," said Cantor's Pado.
"The result has been an exceptionally strong equity rally despite the clear overbought technical condition."
On Thursday, 24/7 Real Media rose 3.5% before the open after it agreed to be bought by Britain's WPP for $649 million, or $11.75 a share. Microsoft was reported to be interested in buying the Internet advertising firm.
Bullish investors are also betting that growth has slowed enough to contain inflation, but not enough to push the economy into recession.
On Thursday, news that jobless claims unexpectedly fell in the latest week also helped in that regard.
Investors will also wait for the Conference Board's leading economic indicators for April, and at noon Eastern, the Philadelphia Fed index for May.
The dollar extended its rally against the yen on Thursday after Japan's central bank kept interest rates on hold and as GDP data came in slightly below expectations.
Oil futures rose 37 cents to $62.92 a barrel, and gold futures rose 80 cents an ounce to $662.30.
In other news, homebuilder KB Home said it's in exclusive talks to sell its controlling stae in Kaufman & Broad for over $800 million to PAI Partners, at a per-share price below the French builder's market value.
Drug giant AstraZeneca's $15.6 billion acquisition of MedImmune Inc. could be threatened by a lawsuit alleging the deal was structured to benefit MedImmune's senior management more than shareholders, according to a report in the Times (of London) newspaper.
By Nick Godt