gave weak outlooks.
But the PHLX Semiconductor Index bounced off a session low near its 200-day moving average, watched by investors to determine market movement.
"Any time you have a pullback like today, it's going to look like a very good entry point," said Craig Ellis, managing director of Caris & Company in San Francisco. "Investors have shown a lot of interest in adding to well-positioned, big-named stocks, but were looking for a good entry point."
The index was still down 1.9 percent but was up 6 percent for July.
The Dow Jones industrial average dropped 30.72 points, or 0.29 percent, to 10,467.16. The Standard & Poor's 500 Index dropped 4.59 points, or 0.41 percent, to 1,101.54. The Nasdaq Composite Index dropped 12.87 points, or 0.57 percent, to 2,251.69.
On the economy, St. Louis Federal Reserve Bank President James Bullard said he is worried about the risks the United States could fall into a Japan-style quagmire of falling prices and investment. That pressured stocks before a late session rebound.
"Any time you make the comparison that the U.S. might look like Japan that has to be considered a negative," said Michael Sheldon, chief market strategist at RDM Financial in Westport, Connecticut.
Friday's GDP number is widely expected to show U.S. economic growth slowed in the second quarter as some investors fret about the possibility of a double-dip recession.
Michael James, senior trader at Wedbush Morgan in Los Angeles said the market still remains in an uptrend with strong support around 1,100 on the S&P 500. "The bulls are still in control of the market right now," he said.
Nvidia and Symantec cut expectations for the next quarter, raising questions about demand for technology components and contributing to concerns that the economic growth is slowing.
Nvidia fell 9.9 percent to $9.13, and Symantec dropped 11.2 percent to $13.03.
The PHLX semiconductor index fell as much as 2.8 percent on Thursday, its largest percentage decline in nearly two weeks, taking the index near its 200-day moving average. The 200-day average, now near 348, served as resistance on July 20.
"We've had a SOXX that's been trapped in the trading range between 330 and 370, and just a few days ago we were toward the higher end of that range," Ellis said. "We finally got some bad news so we've sold off back toward the middle of that range."
The index hit a five-week closing high just below 370 on Monday.
Exxon Mobil Corp, the S&P's largest company by market capitalization, fell 0.9 percent to $60.34 after reporting a better-than-expected quarterly profit.
Consumer staples also fell, with the S&P consumer staple index down 1.1 percent after Kellogg Co lowered its outlook. Its shares fell 6.9 percent to $47.98.
Through Thursday morning, 60 percent of companies in the S&P 500 have reported quarterly earnings, with 75 percent of companies beating expectations and 35.1 percent year-over-year earnings growth.
But companies' forecasts for the third and fourth quarters have frequently missed Wall Street's expectations.
"Earnings are looking good, but confidence in the future is missing," said Gail (GAIL.NS : 461.6 +1.9
) Dudack, chief investment strategist at Dudack Research Group in New York.
(Reporting by Edward Krudy; Additional reporting by Matthew Lynley, Rodrigo Campos and Leah Schnurr; Editing by Kenneth Barry)
