NEW YORK (AP) -- Stocks slipped in early trading Thursday as unease over Europe overshadowed an encouraging report on unemployment claims and good results from big retailers including Wal-Mart Stores.
The Dow Jones industrial average was down 48 points at 12,548 in the first half-hour of trading. The Standard & Poor's 500 index fell seven points to 1,317. The Nasdaq composite fell 19 points to 2,854.
The Labor Department reported that applications for unemployment benefits held steady last week, a sign that layoffs are not increasing.
Wal-Mart stock rose 5 percent after reporting a 10 percent jump in first-quarter income, beating Wall Street expectations. It was a big turnaround for the retailer, which had suffered during the economic downturn as low-income customers were hit hard by joblessness and home foreclosures.
Despite positive news from the U.S., investors continue to fret about developments in Europe and whether Greece might be forced to exit the euro bloc, something that investors fear would cause turmoil on global markets.
Greece's caretaker Cabinet was sworn in Thursday and will hold power at least until next month's election. In the recently-held elections Greeks didn't given any party a majority, but they did give strong support to politicians who rejected the tough austerity measures that came with the country's financial bailout.
Without that rescue package, Greece will likely default and be forced to leave the 17-country euro zone, which would destabilize other countries that use the euro. German, French and Spanish stock markets all fell more than 1 percent.
Collateral economic damage is already being felt by other members of the euro bloc.
Spain was forced to pay sharply higher interest rates to raise $3.18 billion in a debt auction Thursday. And shares of Bankia, which Spain nationalized last week, plunged 20 percent on a report from the newspaper El Mundo stating that depositors have withdrawn over $1 billion since last Wednesday.
Oil prices continued to trade lower, falling below $93 a barrel on Thursday, extending a sharp two-week sell-off, as traders worried about the potential impact on global growth from the European crisis. Crude oil has plummeted about 12 percent from $106 two weeks ago.
Energy companies traded lower. Chesapeake Energy fell 4 percent, while WPX Energy declined 6 percent.
Among other stocks making big moves:
— GameStop fell 9 percent after the world's largest video game retailer reported its first-quarter profit fell 9.8 percent, as fewer customers visited its stores and bought new games and systems.
— Sears Holdings rose 7 percent after the beleaguered retailer turned a profit in the first quarter, benefiting from a gain on the sale of some stores.