Stocks Fall, but AIG Still Climbing

The stock maket edged lower on Thursday but some major financial names remained as bright spots, limiting the declines in major indexes.

The Dow Jones Industrial Average was recently down 30 points, or 0.3%, at 9250.82, hurt in part by a decline in component Cisco Systems shares after it said late on Wednesday that its profit dropped amid a slump in sales. Cisco's shares were recently down 0.6% after being down 1.3% earlier.

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But American Express was a big winner among the blue chips, up more than 4% after it said credit trends among its cardholders are showing signs of improvement for the first time in 18 months.

Financials have been particularly strong throughout the week so far despite a lackluster move in the broader market. Several companies that fared worst in last fall's crisis have led the way. In some cases, there has been favorable corporate news driving the gains, but in other instances a lack of catalysts has puzzled traders.

American International Group, whose shares surged 60% Wednesday, was up by another 11.8%. The company reports earnings Friday, and it recently named a new chief executive. Fannie Mae shares rose 9.5% and Freddie Mac shares rose 10%. CIT Group shares were up 19.4%. Citigroup, which rallied on record volume at the New York Stock Exchange on Wednesday, was up another 4.8% in recent action.

Morgan Stanley shares rose 2% after it said it would repurchase warrants from the U.S. government for $950 million, but were recently down 0.9%.

Investors also continued to pay close attention to the jobs picture. The number of workers filing new claims for state jobless benefits fell 38,000 to 550,000 last week, providing another glimmer of hope that the economy may be on the road to recovery. The four-week average of new claims, which aims to smooth volatility in the data, fell to 555,250, the lowest level since Jan. 24.

Despite the relatively upbeat claims reading, Treasury prices held steady. The 10-year note's yield was little changed at 3.752%.

Harold Lavender, an independent trader in the Chicago Board of Trade's bond-futures pits, said participants there are still on guard against nasty surprises in the government's monthly employment data due out Friday morning – the week's most highly anticipated economic release.

"That's the way these markets have been trading lately, with everything revolving around that one number," said Mr. Lavender. "You might get some activity around things like claims throughout the month, but everyone wants to know what that bottom line is on Friday morning."

Other stock measures slipped. The Nasdaq Composite Index was down 0.7%. The S&P 500 was off 0.5%.

Retail sales results Thursday indicate that consumers remain reluctant to spend. Discount giant Target and J.C. Penney, the department-store operator, reported drops in same-store sales in July. Still, those results and sales reports across the sector were better than Wall Street had been braced for, and the shares of many chains moved higher.

The Bank of England kept interest rates on hold and voted to increase its bond-buying program, suggesting it still harbors concerns about the sustainability of recent signs of economic improvement. The move pressured the pound against other currencies. The European Central Bank left interest rates unchanged.

Stock markets in Europe mostly looked past the central-bank meetings and focused on earnings, with major indexes moving higher. In Asia, the Nikkei 225 rose 1.3%.