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Stocks finish seesaw day with modest gains

Stocks closed higher for a second day Thursday after traders found room for optimism in mixed economic reports.
/ Source: The Associated Press

Stocks closed higher for a second day Thursday after traders found room for optimism in mixed economic reports.

The Dow Jones industrial average rose about 6 points a day after leaping 226. It was the first back-to-back gain for the Dow since late April.

Stocks climbed on reports that business at the nation's services companies grew in May and that the number of people seeking first-time jobless claims slipped for a second week. The gains faded at times as the day wore on, but stocks recovered by the close as traders looked to the Labor Department's May jobs report on Friday.

The employment report is the most closely watched item on the economic calendar. Economists predict that employers added 513,000 jobs in May. It would be the biggest jump in 26 years, but as many as 300,000 of the workers hired in May were expected to be temporary positions to help conduct the U.S. census. Still, even temporary hiring could bring a bump in consumer spending.

The economic news gave a boost to much of the market but energy stocks posted some of the biggest gains after the price of oil rose. Range Resources rose more than 6 percent, while Noble Energy added more than 5 percent.

Stocks have moved erratically in the past week after major indexes hit new trading lows for the year on May 25. It's still not clear whether the market has finished a slide that began in late April after stock indexes touched their highest points of the year.

The market has been vulnerable to swings because of worries about the economic fallout of the Gulf oil spill and the economic problems in Europe.

Bill Schultz, chief investment officer at McQueen, Ball & Associates in Bethlehem, Pa., said the gyrations are keeping some everyday investors from putting money into the market.

"They're seeing these whipsaw trades and for a lot of them it feels almost like a casino," he said.

The Dow rose 5.74, or 0.1 percent, to 10,255.28. The Dow's two-day gain was the first since April 28-29.

The Standard & Poor's 500 index rose 4.45, or 0.4 percent, to 1,102.83, while the technology-focused Nasdaq composite index rose 21.96, or 1 percent, to 2,303.03.

About two stocks rose for every one that fell on the New York Stock Exchange, where volume came to 1.2 billion shares compared with 1.4 billion Wednesday.

Bond prices slipped, sending interest rates higher. The yield on the benchmark 10-year Treasury note rose to 3.37 percent from 3.35 percent late Wednesday.

Crude oil rose $1.75 to $74.61 per barrel on the New York Mercantile Exchange. Gold fell.

In economic news, the Labor Department said first-time claims for unemployment benefits fell by 10,000 to 453,000 last week. The drop coincided with a report from payroll company ADP that said private employers added 55,000 jobs in May.

Both reports fell just short of economists' forecasts, but still showed some improvement in the job market.

The Institute for Supply Management's report on services businesses provides some hope that more jobs will be added in the coming months. The ISM's index remained steady at 55.4 last month. Any reading above 50 indicates growth. Its employment index signaled job growth in services for the first time in 28 months.

While service industries recover slowly, manufacturing continues to show some of the most consistent growth. The Commerce Department said factory orders rose by 1.2 percent in April. That was below the 1.8 percent gain forecast by economists polled by Thomson Reuters. The slowdown came after orders jumped in March by their highest levels in six years.

Among stocks, Range Resources Corp. rose $3.11, or 6.5 percent, to $51.01. Noble Energy Inc. climbed $3.26, or 5.4 percent, to $63.41.

The Russell 2000 index of smaller companies rose 6.85, or 1 percent, to 667.37.

Britain's FTSE 100 gained 1.2 percent, Germany's DAX index rose 1.2 percent, and France's CAC-40 climbed 1.6 percent. Japan's Nikkei stock average rose 3.2 percent.