NEW YORK (CNN/Money) -
Stocks recovered from a steep selloff near the close Wednesday, led by gains in blue chips.
The Dow Jones industrial average (up 25.69 to 10045.16, Charts) and the Standard & Poor's 500 (up 1.83 to 1097.28, Charts) index both rose modestly after sinking more than 1 percent apiece in afternoon trading.
The Nasdaq composite (down 5.76 to 1925.59, Charts) fell 0.3 percent, but was off as much as 2.3 percent in the early afternoon.
Stocks rallied Tuesday, snapping back after a three-session selloff on worries about rising oil prices and interest rates, as well as the ongoing issues in the Middle East.
The selling picked up again early Wednesday. But after hitting new lows for the year late in the session, the major gauges began to recover heading into the close.
"I think we're in a bottoming process and that once we get through this, we could see the market rally again," said Brian Bensch, investment manager at Melhado, Flynn & Associates. "We may see a few more days of selling or of jagged trade, particularly as we have a lot of economic news to get through. But I'm actually feeling more optimistic than I have recently."
A number of key inflationary reports are due in the next two days, including producer prices, consumer prices, retail sales and business inventories, among others. For a look at how these reports are bound to impact interest rates in the short-term, click here.
Due Thursday, retail sales in April are expected to have fallen 0.2 percent after rising 1.8 percent in the previous month. Sales excluding the volatile auto component are also expected to have fallen 0.2 percent, after rising 1.7 percent in March.
Also due Thursday, the producer prices index (PPI), a key inflationary gauge, is expected to have risen 0.3 percent in April after rising 0.5 percent in March. The so-called "core PPI," is expected to have risen 0.2 percent, the same as it did in March.
After the close of trade Wednesday, Walt Disney (DIS: up $0.02 to $23.00, Research, Estimates) reported earnings of 26 cents per share, a nickel more than what analysts were expecting and up from a year earlier. The stock gained in after-hours trade, having ended the regular-hours session nearly unchanged.
Heavily traded Nasdaq web search stock Mamma.com (MAMA: up $0.04 to $10.43, Research, Estimates) was bound to be active Thursday, after the company posted quarterly earnings and revenue late Wednesday that more than doubled from a year earlier.
What moved?
After having been decidedly negative until about 30 minutes before the close of trade, stocks closed in mixed territory.
Helping lead the blue chips higher was the financial sector, which bounced after several down sessions. Bank stocks, real estate investment trusts and others tend to have a tougher time in a rising rate environment, and amid all the concerns about higher rates, these stocks had been hit hard.
On the Dow, both J.P. Morgan Chase (JPM: up $0.58 to $35.77, Research, Estimates) and Citigroup (C: up $0.62 to $46.31, Research, Estimates) gained more than 1 percent.
The tobacco industry was dealt a big blow when the Florida Supreme Court ruled that it would review the dismissal of a $145 billion judgment against the industry.
Dow stock Altria (MO: down $3.60 to $49.80, Research, Estimates), parent of Philip Morris, tumbled 6.7 percent.
Investors returned to taking a 'so what?' attitude about solid earnings, pushing Cisco Systems (CSCO: down $0.29 to $21.96, Research, Estimates) down lower, even after the company reported earnings and revenue that rose from a year earlier and topped expectations.
The Cisco report was largely seen as a positive sign for a continued recovery in technology spending. But some investors fretted about its rise in inventories and its less-bullish-than-hoped-for forecast for the fourth quarter.
Cisco stock sank 4 percent for most of the session, but recovered somewhat by the close, ending down 1.3 percent.
Qualcomm (QCOM: down $0.82 to $63.90, Research, Estimates) also bounced back but remained lower, with investors taking profits after the wireless telecom provider boosted its fiscal third-quarter forecast because of stronger licensing royalties and a pickup in demand for its cell phone chips.
(For a look at other earnings due this week, click here.)
The influential semiconductor sector remained weaker, preventing the Nasdaq from gaining on the session.
The Philadelphia Semiconductor (down 8.25 to 461.90, Charts) index, or the Sox, lost 1.75 percent, having been down more than 4 percent earlier. The Nasdaq and the chip sector tend to shadow each other.
Market breadth was mixed-to-positive by the close, after having been negative for most of the session. Advancers and decliners were close to even on the New York Stock Exchange, where 1.68 billion shares changed hands. On the Nasdaq, advancers and decliners were also nearly even as 1.86 billion shares traded.
Investors also digested the morning's economic news. Higher oil prices pushed the trade deficit to a record high in March, the Commerce Department said. In addition, the price of imported goods in April inched higher, in line with expectations.
Treasury prices fell, pushing the 10-year note yield up to 4.80 percent from 4.74 percent late Tuesday. Treasury prices and yields move in opposite directions.
The dollar fell versus both the yen and euro.
A rise in oil prices continued to spark concerns. Light crude settled at a new 13-year high Tuesday and built upon that Wednesday, adding 71 cents to settle at $40.77 a barrel.
COMEX gold added 50 cents to settle at $377.70, well off its highs of the session.
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