* Google drops 8 pct on surprisingly weak results, released at midday
* Seven of 10 S&P 500 sectors end higher, offset tech weakness
* AMD and Chipotle post weak earnings after the bell
* Dow off 0.1 pct, S&P 500 off 0.2 pct, Nasdaq down 1 pct
By Atossa Araxia Abrahamian
NEW YORK, Oct 18 (Reuters) - U.S. stocks fell on Thursday, with technology stocks hit hard after Google's surprisingly weak earnings - released prematurely during the trading day - disappointed investors.
Shares of Google lost 8 percent - the stock's worst day since Jan. 20 - to close at $695 after the Internet giant's third-quarter results showed earnings and revenue fell short of forecasts. The earnings report had not been expected until after the market's close. Trading of the stock was halted at 12:50 p.m. after Google had fallen as much as 10.5 percent to a session low of $676. Trading resumed at 3:20 p.m.
After the midday snafu and the stock's slide, Google was the biggest drag on the S&P 500. Tech stocks suffered, with the S&P 500 information technology index losing 1.53 percent. Shares of IBM, which disappointed investors a day earlier, lost 2.8 percent to close at $194.96 and pull the Dow lower.
"It's a huge impact on the market, and especially the tech stocks," said Paul Nolte, managing director at Dearborn Partners in Chicago. "What happened to Google is a continuation in the tech sector of some very poor earnings numbers. But we're not seeing the same lack of performance across the board from other sectors."
The Dow Jones industrial average dipped 8.06 points, or 0.06 percent, to close at 13,548.94. The Standard & Poor's 500 Index shed 3.57 points, or 0.24 percent, to 1,457.34. The Nasdaq Composite Index fell 31.26 points, or 1.01 percent, to end at 3,072.87.
The day's declines snapped the S&P 500's three-day string of gains, which had pushed the benchmark index up 2.3 percent through Wednesday's close.
The Dow's loss was limited by Travelers and Verizon.
Travelers gained 3.6 percent to $73.94 and gave the biggest boost to the Dow after the U.S. property and casualty insurance company posted record operating earnings.
Verizon Communications Inc rose 2.4 percent to $45.78 after the company reported a record quarterly profit. Verizon attributed these gains to its wireless business. It also posted revenue that slightly exceeded expectations.
Morgan Stanley reported better-than-expected adjusted quarterly earnings on Thursday as big gains in its bond trading business increased its revenue. The stock fell, however, losing 3.8 percent to $17.79.
Technology was by far the day's weakest sector, but seven of the S&P 500's 10 sectors ended the session higher.
Weak jobs data released on Thursday also weighed on the market. Weekly jobless claims rose to 388,000 - or 32,000 more than analysts expected. A Labor Department official said it appeared that state-level administrative issues were distorting the data.
"On a longer-term basis and non-seasonally adjusted basis, the jobs numbers are in line with where they're been all year. And that's still indicative of very slowly improving employment," Nolte said.
Shares of eBay gained 5.5 percent to $50.83 after S&P Capital IQ raised its target price on the stock by $5 to $53.
After the close, Microsoft reported that its fiscal first-quarter profit fell, hurt by a dip in sales of personal computers running its Windows operating system. Microsoft's stock extended its decline in after-hours trading, falling 3.2 percent. The stock had closed the regular session at $29.50, down 0.3 percent.
In other earnings news after the bell, PC chipmaker Advanced Micro Devices Inc reported disappointing quarterly results and announced that it would cut its workforce by 15 percent. The stock rose 3.4 percent after the bell. AMD had ended the regular session at $2.62, down 5.4 percent.
SanDisk Corp shares rose 5 percent after the bell when the company's third-quarter earnings beat expectations, helped by a rebound in flash memory prices. The stock closed at $42.86, down 3.3 percent in the regular session.
Fast-food restaurant chain Chipotle Mexican Grill Inc reported quarterly earnings after the close that missed Wall Street's expectations. Shares of the Denver-based burrito chain lost 12.4 percent in after-hours trading, falling to $250.50 - the lowest level since May 2011. Chipotle's stock ended the regular session at $285.93, down 1.4 percent.
Volume was roughly 6.9 billion shares traded on the New York Stock Exchange, the Nasdaq and the NYSE MKT, compared with the year-to-date average daily closing volume of 6.52 billion.
Decliners slightly outnumbered advancers on the NYSE by a ratio of about 15 to 14. On the Nasdaq, two stocks fell for every one that rose.