Stocks manage advance

NEW YORK (CNNMoney.com) -- Stocks rose Thursday but closed well off the best levels of the session owing to revived worries about the financial sector, and some jitters ahead of Friday's monthly jobs report.

The Dow Jones industrial average (up 68.25 to 12,260.70, Charts) gained almost 0.6 percent. The broader S&P 500 (up 9.92 to 1,401.89, Charts) index added 0.7 percent, and the tech-heavy Nasdaq (up 13.09 to 2,387.73, Charts) composite added almost 0.6 percent.

Treasury prices slipped, raising the corresponding yields. The dollar gained versus other major currencies. Oil prices fell and gold prices gained.

After the close, New Century Financial (Charts) announced that it has stopped accepting new loans and that it has received $265 million in financing. However, investors were not impressed, sending shares of the subprime mortgage lender down by 10 percent in extended-hours trading, after initially sending it a bit higher.

The stock lost more than 25 percent of its value during the regular session on market rumors that it was in danger of filing for bankruptcy protection.

Stocks rallied sharply Tuesday, slipped modestly Wednesday and then recharged for most of Thursday before losing a little steam near the close.

Strength in Asian and European markets provided the initial spark for U.S. stocks Thursday, before momentum took over.

"I think we're back to focusing on the fundamentals, which remain strong," said William Hummer, principal at Wayne Hummer Inc. He cited a still strong global economy and markets, low inflation and solid, if slowing, earnings growth.

A sell-off in Asian markets early last week - combined with worries about the subprime lending market and slower U.S. economic growth - sparked a massive stock decline.

This week has marked something of a recovery for stocks, with investors trying to put the decline in perspective and figure out what to do next.

"I perceive this week as representing a solid reversal of direction, and one that can be sustained in the weeks ahead," Hummer said. "Although there will be other surprises and other down days, I don't think we'll see a repeat of last week."

Blue-chip gains were broad based, with 26 out of 30 Dow stocks rising. The biggest gainers included American Express (up $0.96 to $56.82, Charts), Verizon Communications (up $0.80 to $36.48, Charts) and Honeywell (up $0.72 to $47.31, Charts).

Dow stock AT&T (up $1.08 to $36.51, Charts) rose 3 percent after A.G. Edwards upgraded it to "buy" from "hold," Reuters reported. Additionally, the company saw strong demand for its European corporate bond auction.

A variety of retailers reported February sales at stores open a year or more, also known as same-store sales.

Among the standouts, Wal-Mart Stores (down $0.05 to $47.88, Charts) said same-store sales rose 0.9 percent, missing forecasts for a rise of 1.5 percent. Separately, the Dow component announced that it was raising its annual dividend by 31 percent. Shares were little changed.

High-end retailer Nordstrom (up $2.26 to $52.68, Charts) said sales jumped 9.1 percent, sending shares up 4.5 percent Thursday.

Costco (down $1.86 to $54.26, Charts) slipped 3.3 percent after the company reported weaker quarterly profit and issued a current-quarter forecast that is short of expectations.

Among other movers, Ford Motor (up $0.31 to $7.93, Charts) jumped 4 percent in active trading after Credit Suisse First Boston raised its estimates to "neutral" from "underperform," Reuters reported.

CVS (up $1.09 to $32.41, Charts) shares gained 3.5 percent in active trade after the drugstore chain upped its offer for pharmacy benefits manager Caremark RX (up $0.86 to $62.16, Charts). The increase was made in response to rival bidder Express Scripts (up $1.19 to $76.00, Charts), which increased its offer Wednesday night.

Market breadth was positive. On the New York Stock Exchange, winners beat losers by 3 to 1 on volume of 1.65 billion shares. On the Nasdaq, advancers topped decliners by 3 to 2 on volume of 1.97 billion shares.

A report released in the early morning showed that the number of Americans filing new weekly jobless claims fell more than expected. However, the report was overshadowed by anticipation about Friday's monthly employment figures.

In currency trading, the dollar rallied versus the yen and the euro. The European currency was weaker after the European Central Bank raised interest rates by 25 basis points to 3.75 percent. The Bank of England held rates steady at 5.25 percent.

Treasury prices slipped, raising the yield on the 10-year note to 4.51 percent from 4.48 percent late Wednesday. Treasury prices and yields move in opposite directions.

U.S. light crude oil for April delivery fell 18 cents to settle at $61.64 a barrel on the New York Mercantile Exchange.

COMEX gold for April delivery added $2.60 to settle at $655.50 an ounce.

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