Stocks finished mixed Thursday in a choppy trading session. Some encouraging economic data and positive news from the retail sector lifted blue chips, while the Nasdaq barely budged.
The blue-chip Dow Jones industrial average rose 64.71 points, or 0.71%, to 9,126.45. The broader Standard & Poor's 500 index moved ahead 7.04 points, or 0.73%, to 974.12. The tech-heavy Nasdaq composite index was down 0.47 point, or 0.03%, to 1,652.21.
In economic news, U.S. productivity gained 5.7% in the second quarter, up from a revised 2.1% in the first quarter. The gain was well ahead of consensus estimates.
Also, initial jobless claims for the week ended Aug. 2 dropped 3,000 to 390,000 -- the third straight week the number has been below 400,000. The number of claims is the lowest since Feb. 8. "That indicates that the labor market is stabilizing, but not improving," according to S&P's MarketScope.
In June, U.S. wholesale trade inventories were unchanged, after a downwardly revised 0.4% decline in May. Wholesale sales rose 1.5%, on top of an upwardly revised 0.2% dip in May. The figures were better than expected.
Finally, consumer credit fell unexpectedly by $400 million in June. The revolving credit component fell $1.3 billion, while non-revolving credit increased $1 billion.
No sigificant economic data was expected to be released on Friday.
Two retail giants announced positive developments on the earnings front. Wal-Mart (WMT) said Thursday that its second-quarter earnings would exceed analysts' expectations, thanks to larger than anticipated July same-store sales growth.
Consumer electronics retailer Best Buy (BBY) also gave upward guidance, saying its second-quarter earnings would be higher than previous estimates by 30%.
Higher natural gas prices lifted energy stocks such as Dow component Exxon Mobil (XOM) and competitor ChevronTexaco (CVX).
Computer storage stocks got a lift from EMC (EMC), which was upgraded by Wachovia and Bear Stearns after the company said it saw a slight uptick in corporate IT spending and reaffirmed its third-quarter targets. EMC shares rose 2.5% Thursday.
Embattled hospital operator Tenet Healthcare (THC) posted a second quarter loss, including accounting charges. Despite the loss, Tenet shares rose Thursday after the company agreed to pay $54 million to settle charges related to unnecessary surgery procedures. The company remains under government investigation for other alleged infractions.
The U.S. Treasury's successful auction of 10-year notes was a positive for stocks. "On Friday, the auction will be history and the primary dealers will be looking for buyers in the retail aftermarket," notes S&P MarketScope analyst Paul Cherney. "If there is no interest in the 10-year on Friday and prices drop as dealers get rid of inventory, yields will move higher, this could be a factor limiting the upside for stocks on Friday."
Prices of U.S. Treasuries were slightly higher Thursday, after an $18 billion auction of 10-year notes was met with solid demand. Despite better-than-expected economic data, focus was on the auction, which wrapped up $60 billion in Treasury note refunding this week. The benchmark 10-year note's yield was 4.21%.
"Lacking data and events Friday, expect lighter volumes as Treasuries edge higher on the post-refunding relief bid and positive short term technicals," notes economic research outfit MMS International. "The pre-weekend safe haven bid likely helps the bullish cause as well."
European stock markets were mixed Thursday. In London, the Financial Times-Stock Exchange 100 added 25.2 points, or 0.62%, to 4,095.6, after the Bank of England held rates steady at 3.5%, a 48-year low.
In Germany, the DAX Index fell 43.77 points, or 1.3%, to 3,331.89. German industrial production fell 0.2% in June, largely owing to worker strikes. Also, consumer prices fell. In France, the CAC 40 was up 4.41 points, or 0.14%, to 3,130.56.
In Asia, major stock indexes ended lower. Japan's Nikkei index finished down 58.35 points, or 0.63%, to 9,265.56, following Wednesday's Nasdaq declines. Selling was mitigated by profit-taking late in the session. Meanwhile, Hong Kong's Hang Seng index fell 29.49 points, or 0.3%, to 9,958.05.