U.S. stocks edged higher on Thursday, pushing both the Dow Jones Industrial Average and S&P 500 to fresh records during an otherwise tame session.
The Dow rose 14.88 points to 35,499.85, a record close for the blue-chip index. The S&P 500 climbed 0.3% to 4,460.83, also a record. The Nasdaq Composite outperformed with a gain of 0.3% to end the day at 14,816.26.
Among the S&P sectors, health care and tech outperformed with gains of about 0.8% and 0.6%, respectively, while energy, industrials and materials stocks lagged. Salesforce and Apple were the best-performing stocks in the Dow, while Home Depot and Visa slipped.
"Despite the relatively placid surface, there are some more gyrations under the surface of the S&P 500 today," wrote Goldman Sachs analyst Chris Hussey.
"Industrials, Materials, and Energy all led the S&P 500 through the last few sessions, supported in parted by the hopes for increased infrastructure spending, but are now the worst performers today," he added. "Conversely, we're seeing a rotation back into long duration stocks, including Tech, Healthcare, and Comm Services."
The Labor Department reported Thursday morning that initial jobless claims declined slightly last week as the U.S. labor market continues its recovery from last year's recession. There were 375,000 claims last week, matching estimates. The prior reading came in at 385,000 claims, but was revised to 387,000.
The prices U.S. manufacturers and other businesses pay for labor, raw materials and other goods rose again in July. The government said its producer price index, excluding volatile food, trade services and energy components, rose 0.9% last month versus a forecast for a 0.5% gain.
The update to producer price inflation came a day after the Labor Department said consumer prices surged 5.4% from a year earlier, for the month of July, and 0.5% from the previous month. Core inflation, however, rose by just 0.3% in July, below the 0.4% increase forecast.
"Inflation has, at a minimum, paused," said Brad McMillan, chief investment officer at Commonwealth Financial Network. "For both the headline and core figures, the monthly and annual numbers were stable or down from last month. Based on that data, inflation is certainly not on an unstoppable increase."
"The inflation story is more about isolated components, rather than general increases in prices, and even those components are showing signs of peaking," he added. "As we dig into the numbers, inflation is above where it has been but is showing signs of rolling over and returning to more comfortable levels."
Micron shares closed 6.3% lower after Morgan Stanley predicted a slowdown in the memory chip market and downgraded the stock.
Disney shares gained nearly 0.7%. The theme park and entertainment giant issued quarterly earnings after market close Thursday. The company beat estimates on both profit and revenue.
— CNBC's Michael Bloom contributed reporting.