Stocks rise modestly as oil extends record high run

The retailers' sales data still suggested, however, that high energy costs are leading consumers to alter their spending. Wal-Mart Stores Inc. said sales of groceries, flat-screen TVs and medications helped boost sales last month, but some apparel stores -whose merchandise falls into the category of discretionary items -again saw depressed sales as consumers budgeted more for gasoline and food.

The retail sales readings come a day after soaring oil prices knocked the Dow Jones industrial average down more than 200 points. Yet while oil surged past $124 late Wednesday in electronic after-market on the New York Mercantile Exchange, stocks managed to hold on to their gains.

Mixed economic readings and lofty energy prices could keep the market in a holding pattern through the summer, said Janna Sampson, director of portfolio management at Oakbrook Investments. "With oil high and continuing to go up, it's going to be tough to get the market to have a sustainable rally."

Alfred E. Goldman, chief market strategist at Wachovia Securities, was a bit more optimistic, saying he estimates the economy is four months away from the end of an average-length recession, so the stock market should resume its climb again soon.

"Basically, the market is taking a time-out after the prior six weeks," Goldman said. "The bigger picture is a market that's in the process of transitioning from a bear to a bull, shifting from a situation where the glass is half-empty to one where the glass is half-full. And that takes time."

In a positive sign for the U.S. job market, which has seen four straight months of jobs losses, the Labor Department said Thursday the number of newly laid off workers seeking unemployment benefits dropped by 18,000 last week to 365,000 -a larger decline than expected.

The Dow rose 36.72, or 0.29 percent, to 12,851.07.

Broader stock indicators turned higher after fluctuating in earlier trading. The Standard & Poor's 500 index rose 3.11, or 0.22 percent, to 1,395.68, and the Nasdaq composite index rose 7.01, or 0.29 percent, to 2,445.50.

Bond prices rose. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.79 percent from 3.85 percent late Wednesday.