Tech stocks pushed the Nasdaq higher for the second day in a row Thursday, as the broader market wavered.
The Nasdaq ended the day up 0.7%, lifted by Facebook's strong earnings report. A day earlier, Apple's better-than expected earnings also fueled the tech-heavy index.
But investors largely lacked conviction to push the broader market decidedly in any one direction Thursday. In the summer, volumes tend to be light and all three indexes have gained more than 18% so far this year.
The Dow Jones Industrial Average and S&P 500 hovered around breakeven with a mixed bag of earnings reports and a pair of tepid economic reports keeping investors sidelined. Both indexes did manage to eke out modest gains at the close.
More than a third of the companies in the S&P 500 have reported second-quarter results so far, according to S&P Capital IQ. As of Thursday morning, 66% had topped analysts' lowered expectations.
The Facebook effect: Shares of Facebook surged 30% Thursday, a day after the social networking site posted strong quarterly results, led by a marked improvement in its mobile business.
"Facebook is the one driving the Nasdaq and [30%] is a powerful, powerful move" said Joseph Saluzzi, a partner at Themis Trading.
The momentum also propelled Zynga during the trading day, with the stock ending up almost 7%. But shares of the app developer, which has games on Facebook, tumbled in after-hours trading after the company issued a weak outlook for the third quarter.
Mixed bag of earnings: Dow Chemical and Tripadvisor reported quarterly profit gains.
General Motors reported an improvement in second-quarter earnings, but a slowdown in China pressured overall profits.
Homebuilders were the biggest drags on the S&P 500. PulteGroup reported earnings and revenue that fell way short of forecasts. D.R. Horton also reported earnings that came in shy of expectations.
Baidu shares surged after the Chinese Internet company reported a second-quarter profit that topped analyst expectations.
After the closing bell, Amazon posted a surprise loss for the second quarter, sending shares down 2% in after-hours trading.
Starbucks shares jumped after hours after the coffee giant delivered better-than-expected earnings and sales for last quarter.
Tepid recovery: In economic news, the government released jobless claims data Thursday morning in line with expectations. Initial claims rose to 343,000 for the week ended July 20, an increase of 7,000 from the previous week.
New orders of durable goods, also reported by the Census Bureau, surged past expectations. The number jumped by 4.2% in June to $244.5 billion and has risen for four of the past five months.
But without the nearly 13% gain in orders of transportation equipment, the numbers weren't so hot. "It still gives the story of a very tepid recovery," Saluzzi said.
World markets in the red: European markets ended lower. London's benchmark FTSE 100 index lost almost 0.5% and Germany's DAX fell by 0.96%.
Asian markets ended with losses, even as the Chinese government announced a mini stimulus plan that should give a boost to certain areas of the economy, including small businesses.
Hong Kong's Hang Seng index lost 0.3% and the Shanghai Composite index declined by 0.6%.
In Japan, Tokyo's Nikkei fell by 1.1%.