Dow Closes Strong to Post Slight Gain

NEW YORK (TheStreet) -- Stocks pushed higher in the final hour with two of the three major indexes managing to eke out modest gains during a listless day of trading.

The Dow Jones Industrial Average rose 22 points to 10,595 at the closing bell after spending much of the session in negative territory. The Nasdaq Composite inched up 2 points to 2,303. The S&P 500 ended with a less than 1-point loss at 1,125.

At the close of trading 11 of the 30 Dow components were in the red, dragged by Alcoa (AA), down 1.3%, Bank of America (BAC), down 0.7%, Kraft Foods (KFT), lower by 0.6%, and Pfizer (PFE), off by 0.6%. Gainers on the index were Hewlett-Packard (HPQ), up 2%, Cisco Systems (CSCO), up 1.5%, Intel (INTC), up 1.2% and Du Pont (DD), up 1.1%.

Better-than-expected jobs data failed to cheer investors as mounting evidence points to a slow recovery ahead. The Labor Department said early Thursday that the number of people filing for initial unemployment benefits dropped by 3,000 in the week ended Sept. 11 to a seasonally adjusted 450,000. It was the lowest level of first-time claims in two months and the third decline in four weeks, indicating the jobs market may be stabilizing. The figure was expected to rise to 460,000, according to consensus estimates from Briefing.com.

The Bureau of Labor Statistics also revealed that the producer price index, which measures prices of goods at the wholesale level, rose 0.4% in August, more than the projected 0.3%, on the back of rising energy costs. However, core PPI -- which measures the price of goods excluding food and beverages -- rose only 0.1%, in line with expectations. The figures helped abate concerns about deflation.

"The PPI really took some of the deflation risk off the table for the short term, with energy prices rising after four months of decreases," said Linda Bakshian of Federated Investors. "Over the long term, the deflation outlook is still cautious because of low interest rates and higher deficit spending."

On whether the Federal Reserve would consider another round of quantitative easing, Bakshian said the central bank would likely wait to see if economic conditions worsen before making a move. "If economic data improves, [quantitative easing] will not be necessary," she said.

Philadelphia's Federal Reserve said that manufacturing activity in the region was flat in September, as new orders and shipments declined for the second consecutive month. The index reading improved to -0.7 from -7.7 recorded in August. Economists had expected a positive reading of 2, according to Briefing.com. A positive number indicates expansion. While the reading was only slightly below negative, it was the second straight month of negative numbers after 10 consecutive months of positive numbers.

In the housing market, RealtyTrac said the number of homeowners that received initial notices of default fell 30% in August. The data should point to fewer foreclosures but the report also showed that lenders repossessed 95,000 homes last month, a record high.

Global stocks were lower Thursday , led by China's Shanghai Composite, which fell 1.8% on fears that regulators will require banks to raise more capital. Japan's Nikkei ended the day flat, as Japan continues its efforts to weaken the yen against the dollar. Hong Kong's Hang Seng ended 0.2% lower.

European stocks also closed lower on Thursday after retail sales in U.K. unexpectedly fell. Germany's DAX, and the FTSE in U.K. closed 0.1% and 0.3% lower respectively.

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