Stocks rise on oil price drop, mixed economic data

The dollar was lower against most other major currencies, and gold prices climbed.

In other economic data, the Fed said nationwide industrial output sank for the second straight month in April by 0.7 percent, due to big cutbacks in the automotive and other manufacturing industries. The drop was more than double analysts' average prediction.

The Labor Department said the number of laid off-workers applying for jobless benefits rose last week by 6,000 to 371,000 -near the average analyst forecast, and suggesting that the labor market remains weak but in check.

In deal-making news, CBS agreed to buy online technology news and entertainment company CNet Networks Inc. for about $1.75 billion. The owner of the CBS television network and TV stations said the deal will boost its online presence and allow it to tap the growing market for online advertising.

CBS fell 59 cents, or 2.4 percent, to $24.23, while CNet rose $3.47, or 44 percent, to $11.42.

General Electric plans to auction off its Louisville, Ky.-based appliances business, according to The Wall Street Journal. GE has hired Goldman Sachs Group Inc. to run an auction for the appliance division, according to the newspaper, which quoted unidentified sources. The sale is seen yielding between $5 billion and $8 billion. GE slid 14 cents to $32.37.

Meanwhile, IAC/InterActiveCorp's Ask.com has bought a stable of Internet reference sites that includes Dictionary.com in its latest effort to distinguish itself from online search leader Google Inc. and other much larger rivals. IAC/InterActiveCorp fell 2 cents to $23.71.

But as companies find the corporate climate more operational, a separate concern remains: whether higher food and energy prices are hampering Americans' ability to spend. Jim Herrick, manager of equity trading at Baird & Co., said oil's retreat Thursday helped boost the stock market, but that the cost of energy remains a concern.

"At the end of the day, it's still affecting consumers and the way consumers spend," Herrick said. "It's definitely at the forefront of investors' minds."

J.C. Penney's quarterly profit came in a bit better than expected, helping its shares rise $2.07, or 4.7 percent, to $46.32, but it said a decline in consumer spending cut its first-quarter profit in half, and predicted "difficult" conditions for the entire year.