Stocks pared their gains on Thursday, this first day of the second quarter, as weakness seeped into the tech sector.
Stocks had started the day strong after positive reports on initial jobless claims and manufacturing.
The Dow was back near the 10,900 mark after barrelling toward 11,000 earlier. The Nasdaq turned negative.
The ISM reported its gauge of manufacturing activity rose to 59.6 in March from 56.5 in February. Measures of orders, production and prices were all up, though employment slipped. Economists had expected a more modest uptick to 57. A separate report showed construction spending fell 1.3 percentin February.
“The continued improvement in the manufacturing sector is the clearest sign that the recovery has legs,” Joel Naroff of Naroff Economic Advisors, wrote in a note to clients. "With vehicle sales looking pretty decent for March, there is no reason to think that a slowdown is coming."
The Labor Department said weekly jobless claims fell 6,000 to 439,000, just a shade better than expected but enough to fuel investor enthusiasm after a drop in the market Wednesday.
This helped soothe some jobs jitters ahead of tomorrow's employment report from the government. The market had been rattled in the prior session after ADP report a decline in payrolls last month.
A report from Challenger Gray & Christmas showed that planned layoffs for March surged 61 percent. The level remains well below the 2009 rate, the firm pointed out.
Investors will get the all-important March jobs report Friday, despite the U.S. market holiday.
Economic reports have been mixed this week, which has a lot of market pros pruning their forecasts.
Goldman Sachs today lowered its forecast to 275,000 jobsadded to nonfarm payrolls to 200,000 from 275,000. And the consensus is now down to 185,000. Whisper numbers had been up near 300,000.
“[I] shrugged off the jobless claims today and everyone’s concentrating on the other numbers,” said Michael Cohn, chief investment strategist at Global Arena Investment Management.
As for the Fed, Cohn said policy makers are more cautious than the market on growth going forward and with taxes rising in 2011 and stimulus running out, they're "not going to be raising any interest rates anytime soon."
On the commodities front, oil prices jumpedtoan 18-month highnear $85 a barrel, despite a stronger dollar, which climbed to a seven-month high against the yen. The dollar is expected to fall next week as this week's economic reports have sent mixed signals on the strength of the recovery. Meanwhile, gold prices ralliednear $1,127.
Banks were mostly higher today, with Bank of America and JPMorgan both up about 1 percent.
Shares of Primerica, the door-to-door insurance-sales company spun off by Citigroup, shot up about 30 percent on its debut. Citigroup rose more than 2 percent.
Ford shares jumped after the no. 2 U.S. auto maker said sales jumped 43 percent in March, excluding sales by the Volvo unit it is selling to China's biggest private carmaker.
GM kicked things off this morning, reporting its sales rose 43 percent in March. Toyota expects to see its sales were up as much as 40 percent last month.
Apple shares rose ahead of the release of the much-anticipated iPadthis weekend.
US-traded shares of BlackBerry maker Research In Motion fell more than 5 percent after its quarterly earnings missed expectations. And Goldman Sachs cut the company to "sell" from "neutral" this morning due to "reduced confidence" in the firm's earnings going forward.
Meanwhile, U.S. shares of Nokia jumped after the Swedish wireless-device maker won handset agreements with two Chinese distributors worth over $2 billion.
Micron Technology reported its second consecutive quarterly profit after three years of losses, helping its shares gain.
BlackRock shares took a hit after Citigroup downgraded the asset-management group to “sell” from “buy,” citing the firm’s first-quarter results could be a negative catalyst for the stock because of overly high margin expectations.
Next week, traders will be closely watching a slew of economic indicators including the ISM services index on Monday and pending-home sales on Tuesday.
There are a parade of Fed speakers on the calendar next week, plus the minutes from the Fed's latest meeting are due out. And the Bank of England and European Central Bank will issue decisions on interest rates there.
The earnings calendar is still light but one to note — oil giant Chevron is slated to release its interim results on Thursday.
Still to Come:
FRIDAY: March jobs report; Stock market closed in observance of Good Friday; Bond market closes at noon
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