Stocks closed modestly higher Thursday, recovering from Wednesday's losses, even as oil prices reversed course late in the session to move higher. Cyclical groups such as automobiles, steel and building products led the market higher, while energy groups and homebuilders were weak, says Standard & Poor's MarketScope.
The Dow Jones industrial average gained 15.76 points, or 0.15%, to 10,450.63. The broader Standard & Poor's 500 index added 2.78 points, or 0.23%, to 1,212.37. The tech-heavy Nasdaq composite gained 5.46 points, or 0.26%, moving to 2134.37.
In economic reports Friday, the final reading for the University of Michigan's August Consumer Sentiment survey will be released. Economists polled by Action Economics are expecting the index to be unchanged from the preliminary reading of 92.7, well below July's reading of 96.5.
On Thursday, data showed initial jobless claims fell to 315,000 last week from 319,000 the previous week (revised upward from an initial reading of 316,000), which was in line with economists' expectations.
Crude oil prices settled up 17 cents to $67.49 per barrel, a record New York Mercantile Exchange closing high for the active month contract.
In corporate news, the European Union on Thursday approved Johnson & Johnson's (JNJ) $22.1 billion takeover of cardiac device maker Guidant (GDT) on the condition that the new company sell some smaller cardiovascular medical product units for competition reasons.
The consumer lending unit of General Electric (GE) has agreed to pay about $1.6 billion for a 25.5% stake in Garanti Bank, Turkey's third-largest privately owned bank, the Turkish company announced Thursday.
Eastman Kodak (EK) said it would close some operations in its home city of Rochester, New York and reduce film production operations in China, as it copes with falling sales of film and photo paper. The move will lead to the loss of 900 jobs in total and result in a charge of about $153 million.
Vonage, a provider of discounted residential phone service over the Internet, filed for an initial public offering to raise up to $600 million on Thursday.
On the earnings front, luxury house builder Toll Brothers (TOL) on Thursday posted third-quarter earnings of $215.5 million, up from $106 million in the period a year ago, beating analysts' expectations.
Hormel Foods ((HRL)) reported a 9% drop in third-quarter earnings to $51.4 million, which was in line with Wall Street's forecasts, while its 17% increase in sales was higher than expected.
After the close Wednesday, Moody's Investors Service downgraded the corporate debt of General Motors (GM) and Ford (F) to junk status, following a similar downgrade by Standard & Poor's.
Auto parts maker Johnson Controls (JCI) said Wednesday that it would buy York International (YRK), a manufacturer of heating and air conditioning equipment, for $2.4 billion in cash.
Long-dated Treasuries edged up to close higher Thursday, with the yield on the benchmark 10-year note at 4.16%. Overnight, Chicago Federal Reserve President Michael Moskow voiced concerns over inflation and a potential decline in housing prices, but little impact has been seen on the financial markets, according to Standard & Poor's Marketscope.
European stock markets closed lower Thursday. London's Financial Times-Stock Exchange 100 index fell 19.50 points, or 0.37%, to 5,255.70.
Germany's DAX index lost 59.94 points, or 1.22%, to 4,856.01.
In Paris, the CAC 40 index fell 45.92 points, or 1.04%, moving to 4,378.51.
Asian markets finished mixed Thursday. Japan's Nikkei 225 index fell 97.10 points, or 0.78%, to 12,405.16 as the slide on Wall Street overnight and rise in oil prices presented an opportunity to take profits after recent gains.
In Hong Kong, the Hang Seng index gained 15.25 points, or 0.10%, to 14,889.10. The market was helped by gains in shares of oil companies such as CNOOC, after crude oil prices surged, according to Standard & Poor's Marketscope.