The Dow Jones industrial average and Standard & Poor's 500 index were flirting with 2ý-year highs before heavy selling in the last hour of trading sent prices skidding.

"It could be programmed trades executing when stocks hit those higher levels, or just some profit-taking," said Kevin Caron, market strategist for Ryan, Beck & Co. "There's no real reason for the drop other than that."

The day's economic news was surprisingly good. Unemployment claims fell by a seasonally adjusted 24,000 to 344,000 for the week ending Feb. 14, the lowest level since Jan. 24, giving investors hope that corporate finances were secure enough to prevent more large-scale layoffs.

"This is definitely a welcome sign," Caron said. "It's just one week and one data point, but the overall trend is deceleration in jobless claims and a rise in new jobs, and this fits in with that."

Investors were also cheered by a larger-than-expected rise in the Index of Leading Economic Indicators, the closely watched forecasting gauge. The index rose 0.5 percent in January, 0.2 percentage points higher than estimates.

"I think the theme for the market in February is resiliency," said Brian Belski, market strategist at Piper Jaffray. "Considering the earnings we had in January and the strong performance we had at the end of the year, more than anything it's surprising people on the upside."

Tech issues shed their earlier gains, which were fueled by strong earnings from Applied Materials, the chip manufacturing equipment maker, and a bright outlook for Broadcom Corp., which makes microchip for digital television boxes and other consumer items.