NEW YORK — Stocks edged higher Thursday as better-than-expected results from aluminum maker Alcoa prompted some investors to put money into shares of companies that stand to benefit if a recovery takes hold.
As shares in companies in economically sensitive sectors like technology and energy posted gains, so-called defensive stocks such as those of healthcare and consumer-staple companies lost ground -- a positive sign for a market that had been losing hope for a quick recovery
The gains Thursday were tempered by weak sales reports from retailers and evidence that the labor market was still hurting.
The Labor Department said the number of initial claims for unemployment benefits fell last week to 565,000 -- the lowest level since early January and less than what analysts had expected. But some of the improvement resulted from changes in the timing of auto industry layoffs and the holiday-shortened week, and the number of continuing claims unexpectedly hit a new high.
Retailers did little to help the bullish case for the economy, reporting generally weaker monthly sales, with apparel sellers taking some of the biggest hits.
Investors' selective buying Thursday was a sign they were hesitant to resume the ebullient rally that drove market indicators up as much as 40% in the spring. Stocks started to falter in mid-June as several grim economic reports suggested that a recovery was further away than anticipated. Major market indexes have fallen about 7% since June 12.
The Dow Jones industrial average rose 4.76 points, or 0.1%, to 8,183.17, the second day of modest gains after a 161-point drop Tuesday. The blue chips crossed zero 108 times during trading.
The broader Standard & Poor's 500 index rose 3.12 points, or 0.4%, to 882.68, while the Nasdaq composite index gained 5.38 points, or 0.3%, to 1,752.55. The Russell 2,000 index of smaller companies slipped 0.1%.
About three stocks rose for every two that fell on the New York Stock Exchange.
Government bond yields rose along with stocks. The yield on the benchmark 10-year Treasury note, a widely used benchmark for mortgages and other loans, rose to 3.41% from 3.29% late Thursday.
Shares of Alcoa fell 2.4%. The aluminum producer reported late Wednesday a $454-million second-quarter loss, which was smaller than Wall Street had expected. Investors came away from reading Alcoa's report with the hope that firms had weathered the worst of the recession.
The dollar was mixed against other major currencies, while gold prices rose.
Overseas, key stock indexes rose 0.5% in Britain, 1.3% in Germany and 0.5% in France. Shares in Japan fell 1.4%.