By Steven Russolillo

NEW YORK (MarketWatch) -- U.S. stocks fell slightly in early Thursday trading after weak weekly jobs data overshadowed other economic reports that eased deflation concerns.

The Dow Jones Industrial Average (DJI) was recently down 18 points at 11,077. But financials kept the blue-chip index's gains in check as Bank of America (BAC) dropped 3.2% and J.P. Morgan Chase & Co. (JPM) fell 2.7%.

The technology-heavy Nasdaq Composite (RIXF) fell 0.1% to 2,440. The Standard & Poor's 500 index (SPX) fell 0.1% to 1,176, as the financial sector was the biggest decliner, down 1.3%.

Thursday's modest declines came after the number of U.S. workers filing new claims for jobless benefits increased more than expected last week. The four-week moving average, which aims to smooth volatility in the data, also rose.

But U.S. producer prices rose for the third month in a row in September on the back of higher food prices, a move that could help ease deflation concerns. The U.S. trade deficit also rose in August, inflated by a record-setting deficit with its largest trading partner, China.

Among stocks in focus, Yahoo (YHOO) rose 6.8% after The Wall Street Journal reported AOL and several private-equity firms, including Silver Lake Partners and Blackstone Group LP, are considering a possible takeover bid for the Internet company.

Apollo Group (APOL) plunged 25% after the education company withdrew its fiscal-2011 earnings guidance, citing "the transitional state of the business and the uncertain regulatory environment." Shares of other for-profit schools also fell. DeVry (DV) dropped 17%, Corinthian Colleges (COCO) fell 16% and ITT Educational Services declined 20%.

Conversely, Winnebago Industries (WGO) rose 3.5%. The recreational-vehicle maker swung to a fiscal fourth-quarter profit that easily topped analysts' estimates as revenue surged and cost-cutting continued to pay off.

The biggest earnings news will come after the closing bell as Internet-search giant Google (GOOG) and Advanced Micro Devices (AMD) each report after the market closes. Google was recently off 0.7% and AMD declined 0.7%.

The dollar was weaker against the euro and the yen, whacked by moves by the Monetary Authority of Singapore to tighten policy. The dollar has been on a decline recently as expectations have increased that the Fed will take additional steps to boost the economy.

The U.S. Dollar Index (DXY), which tracks the currency against a basket of six others, fell 0.7%. The euro was recently at $1.4060, up from $1.3957 late Wednesday.

Treasurys fell, pushing the yield on the 10-year note (UST10Y) up to 2.43%. Crude-oil and gold futures both rose. European stocks were mostly higher and Asian markets finished with strong gains.

 
 
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