NEW YORK – Stocks rose modestly for a second straight session Thursday as unemployment claims fell unexpectedly and consumer spending grew, if somewhat tepidly, without triggering inflation.
The Dow Jones industrial average rose 55.71, or 0.51 percent, to 10,889.44. Broader stock indicators also were higher. The Standard & Poor's 500 index added 5.33, or 0.42 percent, to 1,268.12, and the Nasdaq composite index gained 14.83, or 0.66 percent, to 2,246.49.
The Labor Department reported that first-time jobless claims fell to a better-than-expected 318,000 last week, down by 13,000 from the previous week. And while the Commerce Department reported a modest 0.3 percent rise in both personal income and consumer spending last month, the report also pointed to falling inflation risks.
Disappointing earnings from Micron Technology Inc. (MU) threatened to pressure technology stocks, which have been battered this month as investors moved to less risky, large-cap stocks. But other tech stocks made gains, led by strong earnings from Research In Motion Ltd (RIMM).
However, light volume — blamed in equal measure on the upcoming holidays and New York's transit strike — meant little interest in bidding stocks substantially higher, analysts said.
"Right now, there's just a lack of solid trading volume out there, so we're struggling to move higher based on the good news we have," said Peter Cardillo, chief strategist and senior vice president at S.W. Bach & Co. "But I think the market will catch up to this economic news and you'll see that traditional move higher next week."
Bonds moved sharply higher after two previous down sessions, with the yield on the 10-year Treasury note falling to 4.43 percent from 4.49 percent late Wednesday. The dollar was mixed against other major currencies, while gold prices moved higher.
Crude-oil futures for February delivery fell 28 cents to settle at $58.28 Thursday on the New York Mercantile Exchange.
Investors also were encouraged by the latest index of leading economic indicators from the Conference Board. The index rose 0.5 percent in November as unemployment claims dropped and energy prices eased.
Still, investors seemed uninterested in bidding stocks strongly higher. With energy prices still at historic highs for this time of year, and uncertainty over the Federal Reserve's interest rate policy once Chairman Alan Greenspan retires in late January, there's little impetus to make a major bet.
"Technically, the market still looks pretty good despite the light volume we've seen this week," said Jeff Kleintop, chief investment strategist for PNC Financial Services Group in Philadelphia. "But we're probably not ready to break out above this level until we get a better read on when the Fed is going to be finished up raising rates."
Micron, a maker of semiconductor products, dropped 50 cents to $13.64 after reporting a 60 percent drop in first-quarter profit due to falling demand and plunging prices for its computer memory chips. The company missed Wall Street profit forecasts by 2 cents per share.
Other chip makers were unaffected, with Dow industrial Intel Corp. (INTL) up 9 cents to $25.97 and Advanced Micro Devices Inc. (AMD) adding 68 cents to $30.02.
Research In Motion Ltd., maker of the Blackberry handheld device, eased Wall Street's concerns about the company's ongoing patent disputes after it announced a sharp rise in profit that beat analysts' expectations by 6 cents per share. RIM surged $6.54, or 11 percent, to $68.30.
The recent spate of acquisition activity continued, with Toronto's Barrick Gold Corp. (ABX) acquiring Vancouver gold producer Placer Dome Inc. (PDG) for $10.4 billion, a deal that values Placer Dome at $22.50 per share, though shareholders can opt for Barrick stock instead. Placer Dome lost 31 cents to $22.34, while Barrick slipped 10 cents to $27.12.
General Electric Co. (GE) added 35 cents to $35.42 after its real-estate division announced the purchase of Arden Realty Inc. for about $3.2 billion in cash, or $45.25 per share. Arden shares slid $1.81, or 3.8 percent, to $45.18.
Advancing issues outnumbered decliners by about 3 to 2 on the New York Stock Exchange where preliminary consolidated volume came to 1.91 billion shares, down from 2.11 billion during Wednesday's session.
The Russell 2000 index of smaller companies rose 4.34, or 0.64 percent, to 684.08.
Overseas, Japan's Nikkei stock average slipped 0.1 percent. In Europe, Britain's FTSE 100 closed up 0.17 percent, France's CAC-40 fell 0.01 percent for the session, and Germany's DAX index added 0.02 percent.