Stock indexes close slightly higher

NEW YORK (AP) — Investors are finding some appetite for risk after a jittery week.

Stocks edged higher Thursday as investors put money into banking and industrial stocks as well as commodities. Investors worried about the economy have been cautious about buying stocks, even after heavy selling earlier this week made shares look relatively cheap.

Investors were encouraged by better-than-expected results from aluminum maker Alcoa Inc., which started second-quarter earnings season and stoked hopes for more upbeat corporate reports to come.

The gains were tempered by weak sales reports from retailers and evidence that the labor market is still hurting. The Dow Jones industrial average tacked on 5 points, a second day of modest gains after tumbling 161 points Tuesday.

Money moved into more economically sensitive industries such as technology, banks and energy, which stand to gain more if a recovery takes hold, and out of defensive shares such as consumer staples and health care stocks ? a positive sign for a market that has been losing hope for a quick recovery.

After an ebullient rally in March and April that drove market indicators up as much as 40 percent, stocks started to falter in mid-June as several grim economic reports suggested that a recovery was much further away than anticipated. Major market indexes are down about 7 percent since June 12.

In other signs of willingness to take on more risk, Treasury bond prices fell sharply as their safe-haven appeal eroded, and a measure of stock market volatility fell.

Analysts expect the market will to continue to drift until investors have a clearer picture from companies of where the economy is headed.

“A lot of people are sitting back, waiting to see if companies are making money,” said Tommy Williams, president of Williams Financial Advisors in Shreveport, La.

According to preliminary calculations, the Dow rose 4.76, or 0.1 percent, to 8,183.17. The Standard & Poor’s 500 index rose 3.12, or 0.4 percent, to 882.68, while the Nasdaq composite index gained 5.38, or 0.3 percent, to 1,752.55.

Despite the small gains Thursday, many investors remains skeptical. There is plenty of evidence on hand, including weak retail sales and record unemployment, to suggest any rebound in growth could be feeble and take longer than investors originally thought.

“I don’t see anything breathing yet,” said Steven Stahler, president of The Stahler Group in Baton Rouge, La., of the economy. “We can drift sideways for a long time. There are so many loose ends and so many unknowns.”

The Labor Department said Thursday the number of initial jobless benefits claims fell last week to 565,000 ? the lowest level since early January and better than what analysts were expecting. However some of the improvement was due to changes in the timing of auto industry layoffs and the holiday-shortened week, and the number of continuing claims unexpectedly jumped to a new high.

U.S. retailers did little to help the bull case for the economy, reporting generally weaker monthly sales, with apparel sellers taking some of the biggest hits.

Bond prices fell, sending their yields lower. An auction of $11 billion of 30-year bonds did little to move the market. The yield on the benchmark 10-year Treasury note, a widely used benchmark for mortgages and other loans, rose to 3.41 percent from 3.31 percent late Thursday.

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