Tech stocks lost momentum for a second day amid weakness in the telecommunications and chip sectors, while bargain-hunting investors snapped up shares of American Airlines parent AMR Corp. following several analyst upgrades.

Across the market, there is growing concern that prices have gotten too high after eight weeks of gains, said Hugh Johnson, chief investment officer at First Albany Corp.

"You have to have a lot of courage to buy stocks at the current levels, and many portfolio managers and savvy investors are thinking twice," Johnson said. "There’s still uncertainty about the pace of the recovery, and current prices already reflect the good earnings news and then some."

According to preliminary calculations, the Dow Jones industrial average closed down 0.44 at 10,623.18.

The broader gauges also were lower. The Nasdaq composite index closed down 23.44, or 1.1 percent, at 2,119.01, while the Standard & Poor’s 500 index lost 3.68, or 0.3 percent, to 1,143.94.

In economic news, the Labor Department reported that the number of people filing claims for unemployment benefits was down for the second week in a row, beating analyst expectations.

Separately, the Conference Board’s index of leading economic indicators rose 0.2 percent in December, matching analysts’ forecasts. The index, considered a predictor of future economic activity, rose on relatively strong consumer spending and indications that the job market is improving.

Overall, profits for the fourth quarter are expected to be 20 percent higher than they were a year ago, but some analysts say the market may be headed for a pause after earnings season.

Speculation also remains a compelling factor, contributing to the market’s volatility, said Bill Groenfeld, head trader for vFinance Investments.

"Every morning I see people placing bets, looking for hot stocks, and then the buying drops off in the afternoon," he said. "The overall, broader picture is earnings, but in the meantime, people are chasing stocks."

Dow component Eastman Kodak Co. closed up $3.49, or 13 percent, at $30.95 after its earnings beat expectations and the company announced plans to cut up to 15,000 jobs. Kodak is shifting its focus from traditional film to the digital photography market.

The day’s other big gainer, AMR Corp., closed up $2.30, or 16 percent, at $16.85, after its earnings, announced late yesterday, beat expectations and several brokerage analysts issued upgrades. The company has struggled to improve its bottom line, cutting labor costs by 22 percent since teetering on the edge of bankruptcy last year.