U.S. stocks were mostly lower Thursday as retail and telecommunications shares lagged and euro zone debt worries prompted some investors to step back from the market's recent surge.

The Dow Jones Industrial Average was down 26 points, or 0.2%, to 11697 in recent trading.

The Nasdaq Composite edged up 0.3% to 2711.

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The Standard & Poor's 500-stock index shed 0.2% to 1274.

The S&P 500's telecommunications sector tumbled 3.1%.

Leading the declines, MetroPCS Communications tumbled 7.3% after the prepaid wireless provider disclosed its fourth quarter subscriber growth slowed from the prior period.

AT&T fell 1.8% after cutting its price for Apple's iPhone 3GS to $49 from $99 as the carrier prepares for heightened competition from a Verizon Wireless iPhone launch expected early this year.

Verizon Communications, which operates Verizon Wireless as a joint venture with Vodafone, slid 2.8%.

Retailers also lagged in the wake of a soft round of December same-store sales figures, which largely fell short of analysts' expectations.

Gap fell 6.7% after reporting a surprise drop in December sales.

Target dropped 6.7% after same store sales increased only 0.9% last month, falling far short of analysts' estimates.

Department store operators were largely lower after same store figures missed analysts' expectations.

Macy's fell 3.1%, while Kohl's shed 2.9%.

However, investors noted that ferocious snowstorms in late December may have pushed some post-holiday shopping into January.

Worries in the euro zone debt markets flared up after the European Union proposed a framework for dealing with bank and investment-firm failures that posed the question of whether bondholders should share the burden in paying for future bailouts.

European Markets

European stocks ended mostly lower Thursday, led down by Portugal and Spain, as nervousness ahead of Friday's U.S. nonfarm payrolls report encouraged traders to book some recent profits.

The Stoxx Europe 600 index closed up 0.4% at 281.49 points, but most of the continent's regional benchmarks finished with losses.

The FTSE 100 index dropped 0.4% to 6,019.51, weighed down by the mining sector.

Shares of precious-metals miner Fresnillo PLC tumbled 5.3% and those of copper miner Antofagasta PLC slipped 3.1%.

Energy giant BP PLC also succumbed to profit taking, ending down 0.5%.

A U.S. probe into the Gulf of Mexico oil spill blamed management failures at BP, but also highlighted the role of contractors Transocean Ltd. and Halliburton Co.

Shares in Transocean rose 3% in Swiss trading.

Portugal's PSI 20 index fell 1.2% and Spain's IBEX 35 declined 1%.

Spanish banking giant Santander dropped 2.1%.

Germany's DAX 30 bucked the negative trend to end up 0.6% at 6,981.39, as shares of airline Deutsche Lufthansa AG surged 2.6%.

In France, the CAC 40 ended virtually unchanged at 3,904.42.

Asian Markets

Asian stock markets were mixed Thursday, though sentiment was supported by very strong U.S. private sector jobs data Wednesday.

Japan's Nikkei Stock Average was up 1.2%, while South Korea's Kospi Composite fell 0.2% to 2079.87.

Hong Kong's Hang Sang Index was up 0.2%, Taiwan's main index was up 0.1%, and the Shanghai Composite index was 0.2% lower at 2831.87.

The mood in the region was cheered by U.S. jobs data Wednesday.

Japanese stocks were also helped by the U.S. dollar's surge against the yen Wednesday.

JVC Kenwood Holdings bounced 26% after the firm officially announced a capital increase plan late Wednesday.

Shares in China were led lower by coal miners hit by profit taking.

China Coal was down 1.1% after rising 6.4% in the previous four sessions, while China Shenhua Energy was off 1.2% after gaining 4.5%.

Base Metals

Base metals closed mixed on the London Metal Exchange

Thursday as a continued run of strength in the U.S. dollar weighed on the markets.

Metal prices slipped from their peaks as the euro tumbled to its weakest level in a month against the greenback, putting pressure on the dollar-denominated commodities by making them appear more expensive when compared with other currency holders.

Copper closed down 0.8% at $9,470 a metric ton.

Aluminum bucked the trend, closing up 2.2% amid continued positive sentiment following a spate of solid economic data.

Oil futures hit a fresh two-week low below $88 a barrel Thursday as the dollar strengthened and equities slipped.

Light, sweet crude for February delivery settled $1.92 lower at $88.38 a barrel on the New York Mercantile Exchange, having fallen as low as $87.55, its lowest trade since Dec. 20.

A stronger dollar weighed on oil prices in the absence of more fundamental cues.

The dollar gained ground as the euro tumbled on optimism about the U.S. recovery, sending traders to the greenback.

Gold futures ended lower as portfolio rebalancing kept its grip on the market and attempts at gains were shortlived.

Gold for February delivery declined $2, or 0.2%, to $1,371.70 an ounce on the Comex division of the New York Mercantile Exchange.

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