NEW YORK (MarketWatch) -- U.S. stock indexes lost most of their opening gains Thursday, extending their fall into a third day, with disappointing retail sales overshadowing all but the technology sector.
After initial gains, the Dow Jones Industrial Average fell 19.7 points in morning trade to 12,507.56, with 12 of its 30 components on the decline.
The S&P 500 was off 3.17 points to 1,351.32. But the technology-heavy Nasdaq Composite rose 5.18 points to 2,327.3, buoyed by Yahoo Inc.'s maneuvering to put more heat on Microsoft Corp. to hike its buyout bid for the firm. .
Shares of Yahoo gained 2%, while shares of Microsoft were up 0.5%.
Early economic data had the U.S. trade deficit widening sharply and weekly jobless claims falling 53,000 to 357,000 last week.
Retailers released same-store sales figures for March, with companies generally producing worse-than-forecast results. Limited Brands Inc. , Wet Seal Inc. and Pacific Sunwear of California were among the disappointments.
Discount retailer Wal-Mart Stores Inc. proved an exception, with it shares offering an early rise, recently up 0.9%, after it lifted its view on first-quarter earnings and reported a 0.7% same-store sales rise.
Bed Bath & Beyond Inc. fell 1.9% after it projecting first-quarter earnings per share may be as much as 32% below forecasts.
On the New York Mercantile Exchange, oil futures fell 64 cents early Thursday to $110.23, while gold futures were off $6 to $927.6.
Heading into Thursday's session, the Bank of England cut interest rates by a quarter-point to 5%, citing "disruption in financial markets." The European Central Bank kept rates steady at 4%, while the central bank of Iceland -- known for having one of the highest interest rates in the developed world -- hiked rates by a half-point.
The dollar dropped sharply against rivals, notably the Japanese yen and the Chinese yuan. The greenback fell below the 7 yuan level for the first time ever.
U.S. stocks Wednesday saw their worst single day in two weeks after oil, gasoline and corn hit records and UPS cut its earnings outlook.
By Kate Gibson