NEW YORK – Blue chips rose Thursday as oil prices eased and investors welcomed a surprise jump in jobless claims, but the broader market barely moved ahead of a key update from technology bellwether Intel Corp.
The Dow Jones industrial average (search) rose 45.89 points, or 0.42 percent, to finish at 10,851.51. The Standard & Poor's 500 Index (search) was up 2.24 points, or 0.19 percent, to close at 1,209.25. The Nasdaq Composite Index (search) was down 1.57 points, or 0.08 percent, to end at 2,059.72.
"This appears to be a fairly defensive market ... while investors figure out what to do next," said Stuart Freeman, chief equity strategist for A.G. Edwards & Sons. "I think the market is still jittery about inflation. There are no real drivers to push us solidly in any direction."
After the closing bell, shares of Intel jumped 2 percent to $25.40, after it raised the mid-point of its first-quarter revenue forecast and boosted its profit margin target.
During the regular trading session, Intel's shares inched up 1 cent to close at $24.85 on Nasdaq.
"In the tech sector, there was good news from National Semi," said John Caldwell, chief investment strategist at McDonald Financial Group. But there was "trepidation ahead of Intel's announcement,", he added.
National Semiconductor (NSM), an S&P 500 constituent, jumped more than 5 percent, or $1.13, to $21.12, after cost cutting and a move to more profitable products meant its results came in ahead of expectations.
That gave a boost to chip stocks and helped limit the Nasdaq's declines. The Philadelphia Stock Exchange semiconductor index rose 1.41 percent.
A surprising increase in first-time jobless claims unnerved the market but also eased fears among some investors that inflation would rise as more workers enter the job market. The Labor Department (search) reported a jump of 17,000 claims last week, to 327,000 — the highest level in two months.
Inflation worries were bolstered, however, as the dollar fell to a nine-week low against the euro. That stole momentum from crude oil prices — another inflationary concern — which fell after Wednesday's sharp rise. A barrel of light crude settled at $53.54, down $1.23, on the New York Mercantile exchange (search).
Thursday marked the fifth anniversary since the Nasdaq's 2000 high, when it closed at 5,048.62, and peaked during the day at 5,132.52.
Negative sentiment surrounding how far the Nasdaq has fallen since then could have weighed on stocks today, said Marc Pado, U.S. market strategist at Cantor Fitzgerald & Co.
"For 10 years, people worried about the anniversary of October 19th, 1987. Every time the anniversary date came up, the market went down — it's just a reminder of how much you lost. So I do think that technology today is being weighed on from that (Nasdaq anniversary) negative sentiment," Pado said.
The bond market made modest gains after a big selloff Wednesday. The yield on the 10-year Treasury note fell to 4.47 percent from Wednesday's eight-month high of 4.53 percent.
"It's surprising bond yields haven't been this high beforehand, with seven interest rate hikes from the Fed," said Michael Palazzi, managing director of equity trading at SG Cowen Securities. "There are inflationary pressures, certainly, but they're good inflationary pressures because there's economic growth here."
Toys R Us Inc. (TOY) added 62 cents to $23.67 after The Wall Street Journal said an investment group including Cerberus Capital Management has proposed buying Toys R Us Inc. outright for about $5 billion as an alternative to the company's plans to split off its toy-retailing business.
Delta Air Lines Inc. (DAL) said it would report a substantial loss for 2005, according to a regulatory filing. The nation's third-largest air carrier said its cash flow may not be enough to meet its needs by the end of the year. Delta, which blamed pension expenses and skyrocketing fuel costs for its fiscal crunch, tumbled 56 cents, or 11.5 percent, to $4.33 on the news.
Microsoft Corp. (MSFT) announced it was purchasing privately held Groove Networks, which makes software for online work collaboration, for an undisclosed amount. Groove founder Ray Ozzie, one of the creators of Lotus Notes in the 1980s, will become Microsoft's chief technical officer, reporting to chairman Bill Gates. Microsoft rose 4 cents to $25.35.
General Motors Corp. (GM) was up 1.56 percent, or 53 cents, at $34.61. GM, the world's biggest auto maker, unveiled a new U.S. incentive program that includes an extra $1,000 cash rebate on most vehicles that have been in inventory for about 125 days or more, and $1,500 on most Cadillacs.
As oil prices slipped, ChevronTexaco (CVX) fell 2.13 percent, or $1.27, to $58.49, while Exxon Mobil (XOM) slipped 0.69 percent, or 42 cents, to $60.37 and ConocoPhillips (COP) was down 1 percent, or $1.04, at $105.56.
Shares of EchoStar Communications Corp. (DISH) fell 6 percent, or $1.87, to $28.72 after a news report that calls into question the accounting at the No. 2 satellite television service. EchoStar may have improperly booked transactions with suppliers and made questionable consulting payments to a friend of the company's chief executive, Bloomberg reported on Thursday.
Overall, trading was active, with 1.6 billion shares changing hands on the New York Stock Exchange, above the 1.46 billion daily average for last year. About 1.83 billion shares were traded on Nasdaq, above the 1.81 billion daily average last year. Decliners outnumbered advancers on the New York Stock Exchange by about 10 to 7 and by about 3 on 2 Nasdaq.
The Russell 2000 index of smaller companies was down 4.14, or 0.66 percent, at 626.94.
Overseas, Japan's Nikkei stock average fell 0.85 percent. In Europe, Britain's FTSE 100 closed down 0.68 percent, France's CAC-40 slid 0.7 percent for the session, and Germany's DAX index lost 0.87 percent.
Reuters and the Associated Press contributed to this report.
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