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Stocks Edge Higher After Encouraging Jobs Reports

By STEVE ROTHWELL
AP Markets Writer

NEW YORK (AP) - Stocks edged higher Thursday after a pair of reports provided more evidence that the U.S. is maintaining a slow but steady economic recovery.

The number of Americans seeking unemployment benefits dropped last week and is near the lowest level since June 2008, the Labor Department said Thursday. Weekly applications are just 1,000 above a five-year low reached last month.

Also, a survey from the payroll company ADP showed that American businesses added 176,000 jobs in August, fewer than in June and July but roughly in line with the monthly average for the year.

The encouraging reports came one day before the government releases its closely watched employment survey for August. Many investors believe that a strong report will ensure that the Federal Reserve will decide to pull back on its economic stimulus at meeting later this month.

The U.S. central bank is buying about $85 billion in bonds a month to keep long-term interest rates low and to stimulate the economy. Fed stimulus has helped fuel a bull market in stocks that has lasted more than four years.

The Dow Jones industrial average rose 15 points, or 0.1 percent, to 14,946 as of 11 a.m. Eastern. The Standard & Poor's 500 index rose four points, or 0.2 percent, to 1,656. The Nasdaq composite gained eight points, or 0.2 percent, to 3,656.

Retail stocks were among the biggest gainers.

Costco rose $3.08, or 2.8 percent, to $114.60 after the discount store chain said revenue at stores open at least a year rose 4 percent in August, slightly faster than Wall Street's expectations. Walgreen's also gained after reporting a strong rise in sales last month. Walgreen's rose $1, or 2 percent, to $50.49 after reporting a 4.8 percent increase in sales.

In government bond trading, the yield on the 10-year Treasury note climbed to 2.97 percent from 2.90 percent. The yield has risen 1.3 percentage points in four months as bond traders anticipate that the Federal Reserve will cut back on its economic stimulus.

Rising yields on Treasury notes matter for the economy because they dictate the direction of mortgage rates and other key interest rates. It appears, however, that investors are getting more comfortable with higher borrowing costs.

"We don't anticipate that a gradual rise in rates will choke off the economy," said Dave Roda, regional chief investment officer for Wells Fargo Private Bank. "We are still looking at very low rates historically."

In commodities trading, the price of oil rose 11 cents, or 0.1 percent, to $107.36 a barrel. Gold fell $21 to $1,369 an ounce.

Among other stocks making big moves, Conn's, a consumer finance company, fell $6.34, or 9.3 percent, to $61.82 after the company reported second-quarter earnings that missed Wall Street expectations.

Copyright 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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