Stocks were modestly higher in another thin trading session Wednesday after investors largely shrugged off a handful of weak economic news and looked ahead to Friday's employment report in addition to earnings season, which kicks off next week.
The Dow Jones Industrial Average climbed, led by DuPont and Caterpillar after snapping a five-day rally in the previous session. The Dow is up about 1,000 points for 2011.
The S&P 500 and the tech-heavy Nasdaq were mixed. The CBOE Volatility Index, widely considered the best gauge of fear in the market, gained above 16.
Among key S&P stocks, consumer staples and industrials advanced, while financials and telecom declined.
“There’s going to be continued volatility in the markets throughout the summer months into early fall,” said Zahid Siddique, portfolio manager of Gabelli Equity Trust. “[But] as the economic indicators begin to improve, there will be less volatility and more stability in the markets by year-end.”
Investors will be closely watching the government's monthly jobs report on Friday, which is expected to show a modest gain after a May slowdown.
In addition, second-quarter earnings season unofficially kicks off next week, with steel producer Alcoa scheduled to report after-the-bell Monday.
Financial stocks including BofA, Citigroup and Wells Fargo fell after shares in Portuguese and Spanish banks tumbled following Moody's downgrade of Portugal. The XLF ETF also traded lower.
In addition, Barclays tumbled almost 5 percent after Moody's said almost a third of European banks being tested for their their resilience in bad markets may need extra support. (Read More: A Warning Sign in the Financials?)
On the tech front, Apple has placed orders for key parts in a next-generation iPhone which it is preparing to launch by year-end, according to sources. The new iPhone is rumored to use wireless chips from Qualcomm , instead of Samsung, used in the current iPhone4.
Meanwhile, a man accused of hacking into AT&T servers and stealing personal information belonging to 120,000 iPad users was indicted.
Netflix edged lower after Merriman Capital downgraded the online-video streaming firm to "neutral" from "buy." The company hit another all-time high Tuesday following news that it will expand serviceto South and Central America along with the Caribbean later this year.
Oil prices declinedamid worries over the sustainability of global economic recovery. U.S. light, sweet crude slipped 24 cents to settle at $96.65 a barrel, while London Brent crude traded near $113. The euro slid for a second session against the dollar.