Stocks Manage Slight Rally

Updated from 4:08 p.m. EST

Stocks finished marginally higher Thursday, with the tech sector enjoying a small rebound from Wednesday's deep losses, after softer, but largely positive, economic data and some strong retail sales results.

The Dow improved 24.81 points, or 0.2%, to 10,495.55; the Nasdaq climbed 5.42 points, or 0.3%, to 2019.56; and the S&P 500 rose 2.09 points, or 0.2%, to 1128.61.

Volume on the New York Stock Exchange was 1.57 billion shares, while 1.91 billion shares exchanged hands on the Nasdaq. Advancers edged decliners by about 5 to 4 on the Nasdaq and were close to even on the NYSE.

Initial jobless claims for the week ended Jan. 31 were a larger-than-expected increase to 356,000 from the revised reading of 339,000 in the week prior; economists had expected a marginal increase. However, claims have now spent 18 consecutive weeks under the key 400,000 level thought necessary for job market improvement.

Fourth-quarter productivity grew by 2.7%, after a revised 9.5% surge in the previous quarter; economists had expected productivity to grow by 3%.

"We would have liked the employment figures to have been better," said Bernadette Murphy, chief market analyst at Kimelman & Baird. "But they were not that bad."

Adolfo Rueda, a technical analyst at Shields, pointed out that several of the major averages are finding strong short-term support and are close to their most oversold levels in a year, which helps to explain the afternoon bounce.

Despite today's Nasdaq snapback, Murphy is nervous the tech-laden index could experience at least a 10% decline moving forward. However, "there is really good support at 1900."

Other Markets

Markets overseas finished mixed with London's FTSE 100 down 0.3% to 4384 and Germany's Xetra DAX off 0.3% to 4015. In Asia, Hong Kong's Hang Seng lost 0.4% at 13,030.9 and Japan's Nikkei gained 0.2% at 10,464.6.

The Bank of England hiked its main interest rate by a quarter of a percentage point to 4%, on concerns strong growth would trigger inflation. This comes just one week after the Fed altered its policy statement slightly, leading many economists to believe the FOMC was preparing the market for higher interest rates.