Dow Closes Higher Ahead of Jobs Data

Weekly jobless claims rose at a lower-than-expected rate, but investors await Friday's government jobs report.
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NEW YORK (TheStreet) -- Stocks edged up by Thursday's close, though the tech-heavy Nasdaq held flat, as investors remained reticent ahead of the government's December jobs report on Friday.

The

Dow Jones Industrial Average

added 33 points, or 0.3%, at 10,607, and the

S&P 500

gained 5 points, or 0.4%, at 1142. The Nasdaq declined by 1 point, or 0.1%, at 2300.

Bank stocks rallied past other sectors today, helping prop up the major market averages.

Bank of America

(BAC) - Get Report

received

an upgrade at Credit Suisse, lifting shares 3.3%.

>>Job Growth on Tap?

The note's "more constructive" outlook on banks lifted shares across the financial sector, as the KBW Bank Index surged 4.1%.

General Electric

(GE) - Get Report

advanced the

most on the Dow, improving by 5.2% on heavy volumes.

Alcoa

(AA) - Get Report

shares suffered a 2.1% slide -- the steepest dip on the blue-chip average -- after Citi analysts cut its rating ahead of next week's earnings release.

Stocks traded in a tight range in the morning after

initial jobless claims came in at 434,000 for the week ended Jan. 2 -- 1,000 higher than the previous week. Economists had been expecting weekly claims of 445,000. The four-week moving average fell for the 18th week in a row, signaling that the improvement trend remains intact and, at 450,240, it marked the lowest level since September 2008.

Robert Pavlik, chief market strategist at Banyan Partners, attributed the early market weakness to investors playing it safe ahead of Friday's key December nonfarm payrolls report from the U.S. Bureau of Labor Statistics.

"There's a bit of cautiousness heading into the nonfarm payrolls report, since very few people want to put their necks on the line before they know what's going on," Pavlik said, adding that overseas weakness and a slightly stronger dollar were also pressuring stocks.

Wall Street has been preoccupied with the employment picture this week as it looks forward to Friday's employment data for December. Economists expect the unemployment rate to hold at 10%, but optimistic market-watchers hope the report will reveal improvements in the labor market, a key indication that the economic recovery is on track.

On Wednesday, the ADP jobs report showed that private employers cut 84,000 jobs in December.

After the closing bell,

Apollo Group

(APOL)

beat the first-quarter earnings consensus by a penny. But the University of Phoenix owner said an Education Department review revealed issues with its Title IV programs, leading to around $1.5 million in liability and the likely posting of a $125 million letter of credit. Shares dipped 4.7% in extended hours trading.

Shares across the retail sector reflected results from

December same-store sales reports. Overall, sales came in slightly better than expected with

Costco

(COST) - Get Report

,

Sears Holdings

(SHLD)

,

Ross

(ROST) - Get Report

and

TJX

(TJX) - Get Report

showing some of the highest gains.

Less-impressive reports came from

GameStop

(GME) - Get Report

,

Abercrombie & Fitch

(ANF) - Get Report

and

Hot Topic

(HOTT)

. Their stocks fell 14.9%, 9.8% and 8.4%, respectively.

Hershey

(HSY) - Get Report

may be next up to woo British confectioner

Cadbury

(CBY)

. Cadbury, which is trying to fend off a hostile bid from

Kraft Foods

(KFT)

,

encouraged Hershey's directors to make an offer, according to

The Wall Street Journal

.

Shares of

Lennar

(LEN) - Get Report

rose 12.9% after the

homebuilder surprised Wall Street with a profit of 19 cents a share. Analysts had been looking for a 48-cent quarterly loss.

Wine and spirits company

Constellation Brands

(STZ) - Get Report

met expectations even as earnings slumped 47% and sales fell 4.2% during its third quarter. Shares declined by 1% Thursday.

Crude oil for February delivery traded 52 cents lower to settle at $82.66 a barrel, slipping from a 14-month high and 10 consecutive days of gains. The February gold contract settled at $1,133.70 an ounce after slipping $2.80.

Natural gas futures dipped in the afternoon after the Energy Information Administration said a fall in weekly inventory levels aligned with forecasts, dropping by 153 billion cubic to 3.12 trillion cubic feet for the week ended Jan. 1. Analysts polled by Platts anticipated a drawdown in storage between 151 billion and 155 billion cubic feet. The February delivery contract settled at $5.81 per million British thermal units after declining by 20 cents.

Meanwhile, the U.S. dollar was trading 0.6% higher against a basket of foreign currencies, according to the dollar index.

Overseas, Hong Kong's Hang Seng was down 0.7%, and Japan's Nikkei was lower by 0.5%. The FTSE in London was slightly lower at 0.01%, and the DAX in Frankfurt was off by 0.3%.

The Bank of England, as expected, kept interest rates at a record low of 0.5% and made no changes to its asset-purchase program.

-- Written by Melinda Peer and Sung Moss in New York

.