First-time applications for unemployment rose to 454,000, the highest level since late October. Economists had expected the number to rise to 407,000. Snowstorms in some parts of the country forced companies to lay off workers, economists said.

Caterpillar Inc. rose 0.8 percent after its fourth-quarter profit quadrupled on strong global demand for mining and construction equipment. Time Warner Cable Inc. gained 2 percent after raising its dividend thanks to a 22 percent jump in income last quarter.

AT&T Inc. fell 3 percent, the largest drop in the 30 companies that make up the Dow Jones industrial average. The company reported that new wireless contracts fell to the lowest level in more than five years.

Procter & Gamble Co., the maker of consumer products like Tide detergent, fell 2.9 percent after it failed to meet analyst's expectations.

The Dow Jones industrial average inched up 2 points, or less than 0.1 percent, to 11,987. The index broke through the 12,000 mark yesterday for the first time since June 2008 before slipping in the late afternoon.