Wall Street edged lower on Thursday after data showed the U.S. economy grew less than expected in the first quarter and a number of companies pointed to rising costs, but the Nasdaq remained close to its 10-year high reached in the previous session.

The slowdown in the economy extended to a report showing new U.S. claims for unemployment benefits surprisingly rose last week to their highest level since January, but investors said they needed to see more data before calling an end to the rally.

Over the next week or so we will get a little bit better sense for whether recent data is something to be concerned about or just a temporary slowdown, said Michael Sheldon, chief market strategist at RDM Financial in Westport, Connecticut.

The Dow Jones industrial average <.DJI> fell 6.24 points, or 0.05 percent, at 12,684.72. The Standard & Poor's 500 Index <.SPX> lost 1.26 points, or 0.09 percent, at 1,354.40. The Nasdaq Composite Index <.IXIC> lost 3.68 points, or 0.13 percent, at 2,866.20.

U.S. economic growth slowed more than forecast in the first three months of the year as higher food and gasoline prices dampened consumer spending and sent a broad measure of inflation rising at its fastest pace in 2-1/2 years. Growth was 1.8 percent compared to a Reuters consensus estimate of 2 percent.

In Wednesday's session the Nasdaq hit a 10-year high on the prospect of continued low interest rates and liquidity until the end of June, after Federal Reserve Chairman Ben Bernanke's first-ever news conference.

Earnings season has been strong but there were signs of creeping costs from some companies. Procter & Gamble Co

lowered the high end of its profit forecast as it trimmed expenses and increased prices to offset rising materials costs. Its shares fell 0.8 percent to $63.54.

Rising costs were also in evidence at Starbucks Corp . The company warned on Wednesday that costs will take a bigger chunk out of earnings than previously anticipated, and its full-year forecast disappointed Wall Street. The shares fell 1 percent to $36.82.

(Editing by Padraic Cassidy)

Ben Bernanke