* Netflix, eBay jump after quarterly results
* Dollar gains as stocks come off their highs
* Dow down 0.1 pct, S&P down 0.2 pct, Nasdaq down 0.5 pct * For up-to-the-minute market news see [STXNEWS/US] (Updates to late afternoon, changes byline)
By Edward Krudy
NEW YORK, Oct 21 (Reuters) - The S&P and Nasdaq edged down on Thursday as a stronger U.S. dollar weighed on the equity market and ended a rally sparked by stronger-than-expected earnings.
The Dow rose slightly, helped by McDonald's Corp
Investors have been trading the dollar and equities against each other recently as expectations the Federal Reserve will pump billions into the economy have pressured the greenback and lifted stocks.
Commodity-linked stocks have been among the most sensitive.
Occidental Petroleum Corp
"The trade has been: weak dollar is good for commodities and is good for any risk-related assets like equities. On dollar weakness, buy those things; on dollar strength, get out of those things," said Bill Strazzullo, partner and chief investment strategist at Bell Curve Trading in Boston.
The euro and the popularly traded S&P E-mini futures contract have tracked each other closely in the last month. In the past 22 sessions, they have had a positive correlation coefficient of 0.89.
The euro had earlier climbed to a high around $1.4050 but failed to sustain gains above key resistance at $1.40 and was trading down 0.3 percent to $1.3924.
The Dow Jones industrial average <.DJI> edged up 7 points, to 11,114. The Standard & Poor's 500 Index <.SPX> lost 2.47 points, or 0.21 percent, to 1,175.70. The Nasdaq Composite Index <.IXIC> fell 10.97 points, or 0.45 percent, to 2,446.42.
Banking stocks were weak as investors continued to wrestle
with confusion in the mortgage market and the chance Bank of
America
"People have been talking about Bank of America for the last few days, and they're going to continue to talk about bank of America until they get better direction from management in quantifying what the true exposure is," said Weston Boone, vice president listed trading, Stifel Nicolaus Capital Markets.
McDonald's gained 1.1 percent to $78.29 after it beat expectations for quarterly profit and same-store sales growth in September.
Travelers' shares gained 0.2 percent to $54.75 after the largest publicly traded U.S. property casualty insurer easily beat estimates as premiums rose in its personal insurance lines. [ID:nN21165866] and [ID:nN21266849].
Stocks rose nearly 1 percent earlier but the gains were
trimmed by afternoon trade as the U.S. dollar <.DXY> gained
ground. The dollar was up 0.4 percent against major currencies,
while the euro
Online auctioneer eBay