* Exxon falls after profit drops
* Colgate profit matches view, shares dip
* Indexes: Dow up 0.2 pct, S&P flat, Nasdaq up 0.2 pct
By Edward Krudy
NEW YORK, April 26 (Reuters) - Wall Street stalled on Thursday following the Nasdaq’s biggest gains this year as new jobless claims missed forecasts in another sign that recent improvement in the labor market may be easing.
Initial claims for state unemployment benefits slipped by 1,000 to 388,000, while analysts expected 375,000 filings. The prior week’s number was revised up.
“They came in a lot higher than expected, which probably is raising a bit of concern again,” said Phil Flynn, senior market analyst with PFG Best in Chicago. “We’ll be in the slog for a while and obviously stocks took a little tumble on it. This could take some momentum away.”
The worry over the economy came as stronger-than-expected earnings, most prominently from Apple Inc, helped drive stocks higher. Of the 200 S&P 500 companies reporting, three-fourths have topped estimates, according to Thomson Reuters data as of Wednesday.
The Dow Jones industrial average was up 21.87 points, or 0.17 percent, at 13,112.59. The Standard & Poor’s 500 Index was down 0.51 points, or 0.04 percent, at 1,390.18. The Nasdaq Composite Index added 5.72 points, or 0.19 percent, at 3,035.35.
Wednesday’s rally helped purged much of the losses incurred earlier in April, when investors worried about market prospects ahead of a seasonally weak period starting in May as well as signs Europe’s debt crisis was getting worse.
The S&P 500 was back above its 50-day moving average after the level was fiercely contested. Stocks pulled back as much as 4.2 percent from yearly highs in early April.
“Despite a very shaky start to April the S&P is only down 1-1/4 percent through yesterday’s close,” said Oliver Pursche, president at Gary Goldberg Financial Services in Suffern, New York. “It could actually be a flat month, which would be terrific if you think about where we stood three weeks ago.”
Earnings season was in full swing as Exxon Mobil Corp , the world’s largest publicly traded oil company, posted lower profit on slumping oil and gas production. Shares were off 1.5 percent to $85.57.
Health insurer Aetna Inc reported lower-than-expected profit after higher claim costs and administrative expenses. The shares fell 0.7 percent to $44.10.
Colgate-Palmolive Co posted higher income and sales. Earnings matched estimates, while sales topped expectations. The shares fell 0.6 percent to $99.
PepsiCo Inc took off 0.3 percent at $66.48 after it reported a smaller dip in earnings than estimated. The soft drink and snack maker stood by its 2012 outlook.
Whirlpool Corp, the world’s largest appliance maker, reported better-than-estimated net, relying on price increases and cost cuts to combat weak demand. The shares rose 0.7 percent to $69.36.
In another troubling sign from the euro zone, economic sentiment fell more than forecast in April as the region’s economy sank into recession.
European equity markets slipped into negative territory after the data reignited concerns about the economy against a backdrop of mixed corporate earnings. The FTSEurofirst 300 fell 0.2 percent.
An important earnings report came from overseas. U.S.-traded shares of Spanish bank Santander fell 3.7 percent to $6.28 after net profit dropped 24 percent after a provision of 3.1 billion euro ($4.1 billion) to cover rising loan defaults.