Stocks edged higher on slow trading Thursday afternoon as Wall Street braced for Friday's jobs report that could indicate whether the Fed will soon end its tightening cycle or not. Today's reports of weekly jobless claims and rising first-quarter labor costs damped some hopes of an economic revival, according to Standard & Poor's MarketScope.
On Thursday, the Dow Jones industrial average gained 3.62 points, or 0.03%, to 10,553.49. The broader Standard & Poor's 500 index was up 2.07 points, or 0.17%, to 1,204.29. The tech-heavy Nasdaq composite index gained 9.94 points, or 0.48%, to 2,097.80.
Looking ahead to Friday, the most closely watched report of the week will be the employment figures being released at 8:30 a.m. ET. Analysts are expecting to see May's nonfarm payrolls rise more than 175,000, after the stronger than expected gain of 274,000 in April.
Thursday brought a mixed batch of economic data. U.S. jobless claims rose by 25,000 to 350,000 last week, up from 325,000 the week before. The number is higher than the median forecast of 328,000 according to economists polled by Action Economics. A report also showed April U.S. factory orders rose 0.9%, lower than the 1% analysts expected.
In addition, U.S. productivity for the first quarter was revised higher to a 2.9% rate of growth, down from the 2.6% rate first reported, and in line with expectations. However, the cost of labor per unit of output came in at an unexpectedly high annual rate of 3.3 percent.
July crude oil futures settled on the New York Mercantile exchange down 97 cents to $53.63 a barrel, after the Energy Department's weekly report showed a larger-than-expected rise in crude oil supplies last week, but a smaller-than-expected rise in distillates. Inventories of crude oil rose by 1.4 million barrels to 333.8 million barrels, and while distillates increased by 700,000 barrels to 106.4 million barrels.
In corporate news Thursday, network computer maker Sun Microsystems (SUNW) said it agreed to buy Storage Technology Corp. (STK) for $4.1 billion in cash. The price of $37 a share represents an 18.5% premium on StorageTek's Wednesday closing price.
Internet auction site eBay (EBAY) said after Wednesday's close that it had agreed to acquire online comparison shopping site Shopping.com for $620 million in cash. The $21 a share price represents a 20% premium to Shopping.com's closing price Wednesday.
On Thursday, a number of retailers reported generally solid sales for May. Among those posting better-than-expected increases were luxury store Nordstrom (JWN), teen fashion shop Bebe (BEBE) and clothing chain Talbots (TLB). Wal-Mart's (WMT) 2.5% same-store sales growth was in line with analysts expectations.
A federal judge granted Energizer Holdings' (ENR) razor maker unit Schick-Wilkinson Sword a preliminary injunction barring its competitor Gillette (G) from airing certain ads for its M3Power razor. The ads claiming that the razor lifts hair up and away from the skin, according to the judge, are "unsubstantiated and inaccurate."
President Bush named conservative lawmaker Rep. Christopher Cox as head of the Securities and Exchange Commission following yesterday's resignation of outgoing chairman William Donaldson.
Treasuries finished slightly higher Thursday, as Minneapolis Federal Reserve President Gary Stern said nothing in a speech to confirm Dallas Fed President Richard Fisher's remarks yesterday that the Fed's tightening cycle was in the "eighth inning.", according to Standard & Poor's MarketScope. The 10-year yield was 3.89%.
European stock markets closed mixed Thursday. London's FTSE 100 index dropped 6 points, or 0.12%, to 5,005.00, on profit-taking following the report that Britain's May construction purchasing managers' index slowed to 52.6 from 54.8 in April. Sugar maker Tate & Lyle dropped after the company said fiscal full-year net income fell 9%.
Germany's DAX index rose 5 points, or 0.11%, to 4,532.17. Carmakers BMW and DaimlerChrysler were gainers.
In Paris, the CAC 40 index, gained 5.47 points, or 0.13%, to 4,183.72. Aerospace group EADS, parent of Airbus, was lower following a report its chief financial officer conceded that Boeing could overtake Airbus in volume of orders this year.
Asian markets closed lower Thursday. In Japan, the Nikkei 225 index fell 49.62 points, or 0.44%, to 11,280.05, on profit-taking following gains in the past five sessions. Tech names such as Advantest and Tokyo Electron were among the decliners.
In Hong Kong, the Hang Seng index fell 58.49 points, or 0.42%, to 13,814.58 on concern over rising oil prices and a lukewarm response to Shenhua Energy, which aims to raise $3.6 billion in the world's biggest initial public offering so far this year.