The Dow and S&P 500 fell on Thursday after Chrysler's bankruptcy filing undercut optimism about upbeat corporate profits and reassuring job market data.

Even so, the S&P 500 closed out its best month in nine years despite the big U.S. automaker's bankruptcy after talks to restructure its debt broke down.

Uneasiness about Chrysler's bankruptcy wiped out earlier gains of more than 1 percent in both the Dow industrials and the S&P 500.

We've got some fairly heavy-handed government intervention here, and the market is concerned about that, said Stephen Massocca, managing director at Wedbush Morgan in San Francisco.

Exxon Mobil Corp was the top drag on the Dow, down 2.6 percent at $66.67, after the world's largest publicly traded company posted a 58 percent drop in quarterly profit that missed Wall Street's estimates.

The Dow Jones industrial average <.DJI> dropped 17.61 points, or 0.22 percent, to 8,168.12. The Standard & Poor's 500 Index <.SPX> dipped just 0.83 of a point, or 0.09 percent, to 872.81.

But the Nasdaq Composite Index <.IXIC> gained 5.36 points, or 0.31 percent, to 1,717.30.

FINANCIALS RANK AS TOP SECTOR IN APRIL

For the month of April, the Dow rose 7.4 percent, the S&P 500 gained 9.4 percent and the Nasdaq jumped 12.4 percent.

The gains for the broad S&P were the largest since March 2000, while the Nasdaq scored its biggest percentage rise since October 2002.

The best-performing sectors in the S&P 500 for the month were financials, up 22 percent, and consumer discretionary stocks, up 18.5 percent.

Although worrisome for the overall economy, Chrysler's Chapter 11 filing lifted its rivals' shares. General Motors rose 6.1 percent to $1.92, while Ford Motor Co advanced 9.7 percent to $5.98.

After the closing bell, MetLife Inc posted a first-quarter loss as its investment income dropped, driving shares of the largest U.S. life insurer down 3.9 percent to $28.60 in extended trade.

Shares of Alcoa fell slightly to $9.06 in after-hours trade after the aluminum producer said it agreed to sell its wire harness and electrical distribution business to California-based private equity group Platinum Equity for an undisclosed amount.

The S&P 500 is up 29 percent from the bear-market closing low set on March 9. Stocks have been bolstered in part by optimism over the state of the banking sector and hopes the recession is easing.

The broad S&P received substantial support from profit reports from companies like Dow Chemical Co , up 18.4 percent at $16 as its earnings handily beat estimates.

However, shares of Motorola fell 7.2 percent to $5.53 despite posting a narrower-than-expected loss as the cellphone maker also announced its cash position fell about $1 billion in the last three months.

SUNNY SIDE OF NASDAQ

Shares of big-cap technology companies lifted the Nasdaq, along with green module manufacturer First Solar Inc , which jumped 23.5 percent to $187.29 after the company posted better-than-expected results.

Of the 280 companies in the S&P 500 that have reported earnings to date, 65 percent topped analysts' estimates, according to data compiled by Thomson Reuters.

However, many of the analysts' estimates had been reduced to reflect the current economic slump.

The latest government data showed the number of workers filing new claims for unemployment benefits unexpectedly fell last week, even as the number of people staying on those benefits rose to a fresh record high.

Trading was active on the New York Stock Exchange, with about 1.74 billion shares changing hands, above last year's estimated daily average of 1.49 billion, while on Nasdaq, about 2.86 billion shares traded, above last year's daily average of 2.28 billion.

Advancing stocks outnumbered declining ones on the NYSE by 1,672 to 1,373 while on the Nasdaq, the trend was reversed: decliners beat advancers on the Nasdaq by 1,360 to 1,335.

(Reporting by Chuck Mikolajczak; additional reporting by Edward Krudy; Editing by Jan Paschal)

California S&P Chrysler