By Alexandra Scaggs And Saumya Vaishampayan 

U.S. stocks turned lower in bumpy trading Thursday, while financial stocks lagged behind after a pair of bank earnings reports fell short of Wall Street forecasts.

The Dow Jones Industrial Average fell 42 points, or 0.2%, to 17384. The S&P 500 was down seven points, or 0.3%, to 2004 and the Nasdaq Composite Index slipped 25 points, or 0.5%, to 4613.

Financial stocks trailed broader indexes, after two major U.S. banks reported disappointing results.

Bank of America Corp. fell 2.2% after it said its fourth-quarter profit fell 11%, hurt by lower trading revenue. Results missed expectations.

Citigroup Inc. fell 2.1% after it said its fourth-quarter profit plunged 86% from a year earlier, weighed down by a massive legal charge and disappointing trading revenue.

"Right now, earnings are in focus," said Dan Greenhaus, chief strategist at New York brokerage BTIG.

In other earnings news, retailer Best Buy Co. slumped 15% after the company warned it will boost spending on efforts to fuel growth, which should start pressuring earnings next quarter.

Prices of safe-haven investments gained. Treasury prices rose, pushing the yield on the 10-year note down to 1.826% from 1.833% on Wednesday. Gold futures rose 1.8% to $1256.30.

An early jump in oil prices helped support a broad advance at the open of trading, when the Dow gained as many as 90 points. Then, stocks turned lower, with the Dow losing as many as 94 points as oil futures pared their gains. Crude oil was recently little changed at $48.52 a barrel.

Thursday's morning turbulence follows multiple intraday swings this month, amid a continuing rise in volatility. The CBOE Volatility Index, which measures expectations for swings in the S&P 500, has closed above its 10-year average of 20 for two sessions in a row, as of Wednesday. It rose further Thursday, climbing 2.5% to 22.01.

Many investors believe stocks can continue to rise in 2015, but they say the path higher will be bumpier. Dan Morris, global investment strategist at TIAA-CREF, which manages about $600 billion, said he was cautiously optimistic on U.S. stocks in 2015, expecting smaller returns than in recent years.

One reason is the outlook for earnings growth. There is "not an expectation for a big acceleration in earnings," he added. Analysts expect fourth-quarter earnings growth to be the slowest since the third quarter of 2012.

In other economic news, data showed that U.S. inflation fell by less than expected. The producer price-index fell 0.3% in December from a month earlier, the Labor Department said. The index measures the prices firms get for their goods and services. Excluding food and energy, prices rose 0.3%. Economists surveyed by The Wall Street Journal had expected overall prices to fall 0.4% and prices excluding food and energy to climb 0.1%.

Earlier, stock futures had fallen sharply after Switzerland's central bank scrapped its policy of capping the Swiss franc at 1.20 to the euro. The Swiss National Bank has intervened in markets since September 2011. In the wake of the SNB's move, the euro dropped as low as 0.93 francs.

There is "rising volatility across fixed income, across equities and across currencies. That's unusual," Mr. Morris said. "The fundamental cause for that is that you have monetary policy that is out of sync globally," he added, referring to a potential tightening of monetary policy in the U.S. and loose policies in Europe and Japan.

Still, European stocks rose broadly, with the Stoxx Europe 600 up 2.2%. Germany's DAX Index rose 2%, France's CAC 40 gained 1.8% and Italy's FTSE MIB rallied 2.4%.

Write to Alexandra Scaggs at alexandra.scaggs@wsj.com and Saumya Vaishampayan at saumya.vaishampayan@wsj.com

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