Stocks finished Thursday mostly higher, as a six-year low in unemployment claims and strong corporate earnings encouraged investors. The day’s momentum sagged in late afternoon trading as investors’ ongoing economic uncertainty resurfaced.
While weekly first-time jobless claims rose slightly, Wall Street was encouraged after the Labor Department said the four-week moving average of claims, a strong indicator of the labor market’s health, fell to its lowest level since April 2000.
Positive earnings reports from Best Buy Co. Inc. and Aetna Inc. also encouraged would-be buyers. However, with longer-term questions remaining about the housing market, the health of the economy, interest rates, oil prices and geopolitics, analysts questioned whether the trend higher could continue.
“Right now, it’s like an absence of bad news is being treated as good news,” said Hans Olsen, managing director and chief investment officer at Bingham Legg Advisers. “I see it as just a lot of noise right now. There’s still a lot out there to deal with.”
The Dow Jones industrial average finished the day up 24.73 points, or 0.23 percent, after gaining 109 points Wednesday. The broader Standard & Poor’s 500-stock index lost 1.87 points, or 0.15 percent, while the Nasdaq composite index fell 11.11 points, or 0.49 percent.
Bonds reversed direction from the previous session and climbed higher as the first auction of 30-year Treasury bonds since 2001 was generally well received. The yield on the benchmark 10-year Treasury note fell to 4.54 percent from 4.59 percent late Wednesday. The dollar was mixed against most major currencies.
Crude oil prices inched higher after the Energy Department reported a drop in U.S. energy stockpiles Wednesday. A barrel of light crude rose 7 cents to $62.62 on the New York Mercantile Exchange.
In earnings news, Best Buy surged $4.13 to $52.96 after the electronics retailer raised its forecast for fourth-quarter earnings beyond analysts’ current expectations. Insurer Aetna, which climbed $3.15 to $99.27, and hotel operator Marriott International Inc., which jumped $1.53 to $67.64, posted strong earnings and also increased their 2006 full-year forecasts.
The strong profits distracted investors from their economic concerns — for the moment.
“The focus has been on earnings, and when you get something like Aetna, then that’s going to help the market,” said Hugh Johnson, chairman and chief investment officer of Johnson Illington Advisors. “But one of these days, that focus is going to shift to inflation and interest rates. And the Fed is going to have to get it absolutely right in order for this market to manage even small gains.”
American International Group Inc. gained 74 cents to $67.12 after regulators said AIG will pay $1.64 billion to settle charges of bid-rigging and accounting fraud with the New York attorney general and the Securities and Exchange Commission.
Oracle Corp. climbed 12 cents to $12.69 after The Associated Press reported the company planned to cut 1,000 jobs, with an announcement expected in an afternoon conference call with industry analysts. The business database maker has been aggressive in cutting jobs after mergers in order to maintain profits.
Investment bank Morgan Stanley installed acting president Zoe Cruz and longtime executive Robert Scully as co-presidents under Chief Executive John Mack. The two will split up oversight of the company’s various businesses. Morgan Stanley fell 9 cents to $61.18.
Dow industrial General Motors Corp. rose 15 cents to $22.14 after it announced a sales incentive program for its sport-utility vehicles.
Overseas markets lent further support to Wall Street’s gains. Japan’s Nikkei stock average rose 1.03 percent, while in Europe, Britain’s FTSE 100 surged 1.46 percent, Germany’s DAX index climbed 1.36 percent, and France’s CAC-40 jumped 1.24 percent.