Stocks inch higher
Wall Street manages modest gains as investors gear up for Friday's employment report. Senate hearing on Bear Stearns also in focus.
NEW YORK (CNNMoney.com) -- Stocks inched higher Thursday, as investors continued to bet that the worst of the credit crisis is behind the market. However, gains were limited by some jitters ahead of Friday's big monthly jobs report.
Investors also kept an eye on the Senate hearing on the collapse and rescue of Bear Stearns and the day's economic news.
The Dow Jones industrial average (INDU), the broader Standard & Poor's 500 (SPX) index and the Nasdaq composite (COMP) all added a few points.
Stocks slipped through the early afternoon after a jump in weekly jobless claims sparked worries about Friday's monthly employment report. However, stocks recovered in the afternoon as investors considered a stronger-than-expected reading on the services sector of the economy and the Senate testimony on Bear Stearns.
Although gains on the day were limited, the fact that stocks have managed to hold on to most of Tuesday's advance - when the Dow jumped 391 points - was a positive sign, said Kenny Landgraf, principal and founder at Kenjol Capital Management.
"Markets are starting to anticipate that the worst is behind us," Landgraf said, with investors continuing to take comfort in the fact that the Fed took action to keep Bear Stearns from going under and dragging on the already-struggling economy.
Additionally, "there's been a bit of a pullback in commodity prices, the dollar has been firming up, and there's a sense that maybe we've seen the lows," Landgraf said.
Investors will now be looking to see that Friday's monthly payrolls report isn't weaker than anticipated, particularly after Thursday morning's surprisingly big rise in weekly jobless claims.
That report sent stocks lower in the morning.
"The weekly report is another sign that the monthly report Friday will show further weakness in the labor market," said Peter Cardillo, chief market economist at Avalon Partners. A weak March jobs report will be the latest indication that the economy saw little if any growth in the first quarter, he said.
The report is expected to show that employers cut 50,000 jobs from their payrolls last month, after cutting 63,000 in the previous month. The unemployment report, generated by a separate survey, is expected to have risen to 5% in the month from a previous reading of 4.8%.
Hearing on Bear Stearns. The CEOs of both JP Morgan (JPM, Fortune 500) and Bear Stearns (BSC, Fortune 500), Federal Reserve Chairman Ben Bernanke and other regulators told Senate lawmakers Thursday that the Bear Stearns rescue prevented what could have been a disaster for the U.S. financial system and the economy. (Full story).
Stocks slipped Wednesday after Bernanke told Congress that he expects growth to shrink in the first half of the year and that a recession is possible.
Economic news. The number of Americans filing new claims for unemployment surged last week to the highest level since September 2005. (Full story)
The Institute for Supply Management (ISM) services sector index rose to 49.6 in March from 49.3 in February, beating forecasts for a slide to 48.5. Any reading below 50 indicates contraction and a reading above 50 shows expansion. Earlier this week, the ISM manufacturing index also beat estimates.
Company news. UBS downgraded Cisco Systems (CSCO, Fortune 500) to "neutral" from "buy," saying the company's orders are set to slow in its fiscal fourth-quarter that ends in July. Shares fell nearly 3%.
Late Wednesday, Research in Motion (RIMM) reported earnings that more than doubled from a year ago and topped estimates. The BlackBerry maker also said current-quarter profit will top previous estimates. Shares climbed almost 6%.
Micron Technology (MU, Fortune 500) jumped 6.3% after Goldman Sachs upgraded it to "buy" from "neutral," saying its a good value relative to earnings. The company reported a wider quarterly loss late Wednesday.
Schering-Plough (SGP, Fortune 500) said it will cut 10% of its workforce as part of its plan to reduce overall costs by about $1.5 billion a year. The stock has been hit hard in recent days after U.S. regulators questioned the effectiveness of the company's top cholesterol drugs. Schering-Plough shares jumped 11%.
Garmin (GRMN) slipped 6.4% in unusually active trading on reports that the navigational-device maker expects first-quarter revenue to fall 40% to 50% from the fourth quarter.
Market breadth was mixed. On the New York Stock Exchange, winners beat losers 3 to 2 on volume of 1.25 billion shares. On the Nasdaq, decliners narrowly edged advancers on volume of 1.99 billion shares.
Commodity prices. U.S. light crude oil for May delivery fell $1 to settle at $103.83 a barrel on the New York Mercantile Exchange.
Gas prices rose to a new record high of $3.289 a gallon, the AAA reported.
COMEX gold for April delivery rose $9.80 to settle at $905 an ounce.
Other markets. The dollar rose versus the euro and the yen.
Treasury prices rose, lowering the yield on the benchmark 10-year note to 3.58% from 3.60% late Wednesday. Bond prices and yields move in opposite directions. 
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