NEW YORK (CNN/Money) - U.S. stock markets closed higher Thursday lifted by economic reports indicating an economic recovery may be on its way.

According to preliminary results, the Nasdaq composite (up 13.70 to 1700.31, Charts) clocked the biggest gains. The Standard & Poor's 500 index (up 6.48 to 990.51, Charts) and the Dow Jones industrial average (up 38.80 to 9310.56, Charts) also each saw a modest rise.

Dell (DELL: up $0.08 to $31.39, Research, Estimates) ended slightly higher ahead of its fiscal second-quarter earnings report, which came out after the close of trading. The company posted earnings of 24 cents a share, in line with Wall Street expectations, and up from 19 cents in the same period last year, according to a consensus of analysts surveyed by First Call. Analysts also will be watching for any signs from Dell that recovery in tech spending is taking place.

Throughout trading, a series of reports released before the bell showing at least economic stability, if not signs of robust growth, helped buoy stocks. Reports that a top al Qaeda planner in Southeast Asia was captured also added strength to the broad market.

But, gains were muted by rising bond yields, which renewed investors' concerns over rising interest rates.

Light volume, stemming from the fact that many investors are taking summer vacation, contributed to a rise in volatility. When volume is low, one large order can give the indexes a big push in either direction. Stocks fluctuated between positive and negative territory in the morning before finding a footing higher in the second half of the trading session.

Here's a look at trading throughout the session.

The Labor Department said jobless claims for the week ended Aug. 9 rose to 398,000 from a upwardly revised 396,000 in the previous week. The reading was a bit higher than economists had expected, but the number remained below 400,000 -- signifying expansion in the labor market -- for the fourth week in a row.

The July producer price index, a measure of inflation at the wholesale level, matched economists' average estimate, rising 0.1 percent. This was well below the 0.5 percent jump in June. The core PPI, which excludes the often volatile food and energy prices, rose 0.2 percent, slightly above estimates.

And the government also said the trade deficit edged down to $39.55 billion in June from $41.48 billion in May, while Wall Street had expected it to inch up to $42 billion.

"It's been pretty quiet all week, volumes have come down...You have pretty significantly reduced volume here in August," said Tim Heekin, head of stock trading at Thomas Weisel Partners. "This morning there was nothing to really move the dial on PPI or jobless claims."

A large portion of Wall Street's attention was also focused on the bond market, where selling throughout the afternoon turned into late-day buying on the drop in prices. Yields had climbed to one-year highs earlier in the day as investors continued to unwind mortgage-related positions, now that the real estate refinancing and borrowing boom has hit a bump.

The yield on the 10-year Treasury note yield slipped to 4.52 percent from 4.56 percent late Wednesday as the price fell 10/32 of a point.

The dollar gained against the euro, but was lower versus the yen.

Back in the stock market, chipmaker Texas Instruments (TXN: up $0.73 to $20.05, Research, Estimates) jumped more than 3 percent after SoundView upgraded the company to "outperform" from "neutral," and made some positive comments on the chip sector.

But putting some pressure on the tech sector, Credit Suisse First Boston cut its weighting in U.S. technology stocks to "neutral" from "overweight," saying an expected recovery in information technology spending had already been priced in.

Retailers also remained in focus. Discount retailer Target (TGT: down $2.24 to $37.70, Research, Estimates) slid more than 4 percent after posting quarterly earnings that came in a penny better than the same period last year, but missed analysts' average estimate by a penny. Kohl's (KSS: down $0.46 to $61.04, Research, Estimates) also dipped more than 1 percent ahead of its report, due after the close Thursday.

Women's clothier Ann Taylor (ANN: up $0.65 to $33.65, Research, Estimates) rose more than 2 percent after an upgrade to "buy" from "hold" by Wedbush a day after the company posted in-line earnings. And Jones Apparel (JNY: up $1.16 to $30.76, Research, Estimates) rallied nearly 4 percent after Davenport upgraded the stock to "buy" from "neutral."

Market breadth was positive, with the number of gainers edging past losers five to three on the New York Stock Exchange, where some 1.2 billion shares traded. On the Nasdaq, advancing issues also held a three to two lead over decliners on volume of 1.3 billion shares.

European markets closed the day higher. Asian stocks finished their Thursday sessions mostly higher.

NYMEX light sweet crude oil futures rose 23 cents to $31.03 a barrel. COMEX gold rallied $3.80 to $367.50 an ounce.