RTTNews - Stocks were able to post modest gains on Thursday, even as a slew of largely disappointing economic reports contributing to some uncertainty in the markets. The major averages saw choppy trading over the course of the day, but late buying interest helped stocks to finish on the upside for the second straight session.

Traders were presented with a number of economic reports on the day, with first-time claims for unemployment benefits showing a modest increase in the week ended August 8th, according to the Labor Department. The headline figure surprised economists, who had expected a modest decrease. Nonetheless, jobless claims remain well off the peaks seen during the spring months.

The jobs report showed that initial jobless claims edged up to 558,000 from the previous week's revised figured of 554,000. Economists had been expecting claims to slip to 545,000 from the 550,000 originally reported for the previous week.

In a separate report, the Commerce Department said retail sales fell 0.1 percent in July. This followed a revised 0.8 percent increase in the previous month. The figure surprised economists, who had expected sales to increase by 0.8 percent.

Additional data from the Commerce Department revealed that business inventories fell by more than expected in the month of June, although the report also showed a notable increase in business sales during the month.

Stocks saw some upside following the results of the Treasury Department's $15 billion sale of thirty-year bonds. The sale drew a high yield of 4.541 percent and attracted strong demand, with the bid-to-cover ratio coming in at 2.54. The bid-to-cover ratio is a measure of demand that indicates the amount of bids for each dollar worth of securities being sold.

The auction completed the Treasury's $75 billion in security offerings this week, designed to refund approximately $60.9 billion of privately held securities maturing on August 15, 2009 and to raise approximately $14.1 billion for government expenditures.

The major averages saw a steady upward move in late-session dealing, closing near their best levels of the day. The Dow finished up by 36.58 points or 0.4 percent at 9,398.19, the Nasdaq climbed by 10.63 points or 0.5 percent to 2,009.35 and the S&P 500 rose by 6.92 points or 0.7 percent to 1,012.73.

Sector News

Networking stocks extended their gains for the second straight session, with the NYSE Arca Networking Index rising by 3.5 percent on the session, climbing to a fresh eleven-month closing high.

The index was led higher by shares of Harris Corp (HRS), which jumped by 12.1 percent on the day and was one of the leaders in the S&P 500. The move came after the firm reported better than expected adjusted quarterly earnings and raised its guidance. With the advance, the stock was able to close at its best price in five months.

Gold and banking stocks also posted notable gains, with the NYSE Arca Gold Bugs Index and the Kbw Banking Index closing up 3.4 percent and 3.1 percent, respectively. Despite the gains, the indices were unable to break out of their recent trading ranges.

Oil service, steel, semiconductor, electronic storage and healthcare provider stocks also saw notable moves to the upside, while modest weakness was visible among tobacco, trucking and utility stocks.

Dow Components

Bank of America (BAC) and Alcoa (AA) led the Dow higher, posting gains of 6.7 percent and 5.8 percent, respectively. Bank of America remained stuck in a recent trading range, while Alcoa closed at its best level in ten months

Wal-Mart (WMT) also rose by a notable margin, moving up by 2.7 percent on the day. The retail giant reached its best closing level in four months after reporting quarterly earnings of $0.87 per share compared to analyst estimates of $0.86 per share.

DuPont (DD), Travelers (TRV), Home Depot (HD) were among the other Dow components that ended the day higher, while United Technologies (UTX) disappointed, falling by 1.3 percent. United Technologies backed off of its best closing level in ten months.

Caterpillar (CAT), McDonald's (MCD), Coca-Cola (KO) and AT&T (T) also fell, posting comparable losses. While the stocks largely extended their recent lackluster movement, Coca-Cola closed at a seven-week low.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region finished higher on Thursday. Japan's benchmark Nikkei 225 Index rose by 0.8 percent, while Hong Kong's Hang Seng Index surged up by 2.1 percent.

The major European markets also closed on the upside, with the German DAX Index and the U.K.'s FTSE 100 Index posting gains of 1 percent and 0.8 percent, respectively, while the French CAC 40 Index rose by 0.5 percent.

In the bond market, treasuries rallied following the results of the thirty-year bond auction. Subsequently, the yield on the benchmark ten-year note closed at 3.591 percent, posting a loss of 11.0 basis points on the day.

Looking Ahead

Traders will focus on three key reports to close out the week on Friday, concluding a busy week on the economic front. Data on consumer prices and industrial production highlight the hour before the opening bell, while the consumer sentiment index is due to be released shortly afterward.

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