Wall Street holds on to rally
Major gauges stick to tight range after recent advance amid upbeat economic news, lower oil prices.

NEW YORK (CNNMoney.com) -- Stocks were little changed Thursday afternoon as investors welcomed upbeat reports on the economy and inflation, but remained wary after the recent rally.

The Nasdaq composite (down 1.12 to 2,184.61, Charts) was little changed with about 2 hours left in the session.

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The Dow Jones industrial average (down 0.24 to 11,382.67, Charts) and the broader Standard & Poor's 500 (down 0.60 to 1,303.67, Charts) index also clung to the unchanged line.

The major gauges had swayed on both sides of unchanged throughout the session on fairly light trading volume.

Thursday brought a heavy spate of economic news, including the July personal income and spending report, which showed strong growth that met estimates. The report's core inflation component rose less than expected.

Shortly after the open, investors took in reports that showed smaller-than-expected declines in manufacturing in the Midwest and in national factory orders.

The day's economic news further quelled recent worries about the pace of the economic slowdown. However, the stock reaction was muted after a five-day advance on the Nasdaq and a three-day advance on the Dow.

Investors also took in an afternoon speech from Ben Bernanke at an economics conference. The Federal Reserve chief said solid productivity growth should continue. However, he did not address interest-rate policy, and stocks showed little reaction.

Fluctuating oil prices and a mixed batch of August retail sales reports added to the session's choppy nature.

"I would look at today as a day of consolidation before we attack tomorrow's employment report," said Barry Hyman, equity strategist at EKN Financial Services.

He was referring to the August jobs report, due before the open of trade on Friday.

As has been the case with recent economic news, investors will be looking for the report to show that the economy is not slowing too aggressively, which would mean solid job creation in the month and a drop in the unemployment rate.

Due to worries about pricing pressure, Wall Streeters will also be looking to see that the report's inflation component - average hourly earnings - is only modestly higher.

August retail sales mixed

A number of retailers reported August sales at stores open a year or more, and the results were mixed.

Among the companies issuing results, Wal-Mart (up $0.01 to $44.63, Charts) said sales rose 2.7 percent, near the high end of its previous guidance. Shares were little changed.

Wal-Mart competitor Target (down $0.57 to $48.01, Charts) said sales rose 2.8 percent, short of expectations for a rise of 3.1 percent.

Nordstrom (up $0.38 to $35.28, Charts) reported same-store sales rose 7.1 percent in the month, more than double what economists were expecting. Shares rose 5 percent.

Gap (down $0.43 to $16.79, Charts) reported a worse-than-expected 7 percent decline in the month, sending shares lower.

JoS. A. Bank Clothiers (up $0.33 to $28.49, Charts) said same-store sales slumped 6.1 percent in the month, versus forecasts for a rise of 4 percent. Shares lost 13 percent.

In other news, JDS Uniphase (down $0.38 to $2.25, Charts) warned late Wednesday that current-quarter revenue will not meet analysts' expectations, sending shares down 14 percent in active Nasdaq trading.

The optical network maker also reported break-even results in the last quarter.

Ciena (down $0.34 to $3.97, Charts) reported a narrower quarterly loss versus a year ago and announced a 1-for-7 reverse stock split. Nonetheless, shares of the telecommunications gear maker slumped 7 percent in active Nasdaq trading.

In merger news, Goldcorp, a Canadian gold miner, said it was buying rival Glamis Gold for $8.6 billion in stock. Shares of Goldcorp (down $2.80 to $27.67, Charts) slumped 8.6 percent on the news, while Glamis (up $7.45 to $46.31, Charts) shares jumped 20 percent.

Also, Valassis Communications, a marketing company, filed a lawsuit to end its $1.3 billion merger with Advo, a direct mail marketer, due to what it said was management's misinformation about the company's finances.

Advo (down $9.62 to $27.18, Charts) shares slumped 25 percent in unusually active New York Stock Exchange trade. Valassis (down $1.76 to $19.25, Charts) shares lost nearly 9 percent.

Market breadth was positive. On the New York Stock Exchange, winners beat losers three to two on volume of 740 million shares. On the Nasdaq, advancers topped decliners by a narrow margin as 1.09 billion shares changed hands.

Economy holds up, inflation mild

July personal income rose 0.5 percent, the government reported before the open Thursday, while personal spending rose 0.8 percent. Both reports met the expectations of a consensus of economists surveyed by Briefing.com.

The report seemed to show that consumer spending is holding up, even amid a cooling in the housing market and still-expensive oil and gas prices. As spending fuels two-thirds of economic growth, the report was seen as encouraging for the economy.

Of greater interest was the report's inflation component, the so-called core PCE index, which strips out volatile food and energy. The PCE index rose 0.1 percent, after rising 0.2 percent in June. Economists thought it would rise 0.2 percent.

While that was a positive, the increase also takes the measure of core consumer prices up to a 2.4 percent annual rate, further moving it above the Fed's presumed target of a 1 percent to 2 percent rise.

Another report, the Chicago PMI, fell to 57.1 in August from 57.9 in July. Economists thought that the manufacturing index would come in at 57.0.

July factory orders fell 0.6 percent in the month, versus economists' forecasts for a drop of 0.8 percent. Orders rose an upwardly revised 1.5 percent in June.

U.S. light crude oil for October delivery fell 43 cents to $69.60 a barrel on the New York Mercantile Exchange.

Treasury prices rose, lowering the yield on the 10-year note to about 4.73 percent from 4.75 percent late Wednesday. Bond prices and yields move in opposite directions.

In currency trading, the dollar fell versus the euro and was little changed versus the yen.

COMEX gold for December delivery rose $7.60 to $633.70 an ounce.


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Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.