NEW YORK (CNNMoney) -- U.S. stocks closed mixed following choppy trading Thursday as investors digested a handful of economic reports.
But volume was light as investors appear to be moving to the sidelines following a decent run in U.S. stocks. The Dow and S&P 500 have climbed for four straight days, and all three major indexes are at their highest levels since early May.
On Thursday, investors sifted through a batch of U.S. economic reports, including a better-than-expected drop in initial jobless claims, a narrowed trade deficit, and a surprise decline in wholesale inventories.
A duo of economic reports out of China were also in focus. Industrial production in the world's second-largest economy slowed for a third straight month in July. However, inflation in China eased to the slowest rate in two-and-a-half years.
The data fueled hopes that China's central bank might intervene with more stimulus measures to boost economic growth.
"It is worth remembering that the first benchmark rate cut was introduced only two months ago," said Mark Williams, chief China economist at Capital Economics. "The full impact of loosening to date has yet to be felt. And there is plenty of room for further stimulus."
Meanwhile, investors also continue to eye quarterly financial results. Nearly 90% of S&P 500 companies had reported their quarterly results as of Wednesday. Earnings are on pace to grow just 0.9% overall.
On the bright side, 65% of the companies topped Wall Street expectations, higher than the average rate of 62% over the past decade.
Beyond American shores, Europe remains a source of anxiety, with worries about a potential Spanish bailout particularly acute. Borrowing costs for Spain and Italy are uncomfortably high, with the Spanish 10-year yield hovering around 7% and the Italian 10-year yield just below 6%.
China's annual inflation rate fell to 1.8% in July, the government's National Bureau of Statistics reported Thursday, down from 2.2% in June. That's the lowest inflation rate in two-and-a-half years.
Industrial production slowed to 9.2% from a year earlier in July, according to China's National Bureau of Statistics. The reading marked the slowest rate of growth since May 2009.
The U.S. trade deficit narrowed to $42.9 billion in June, from $48 billion the prior month. Analysts were expecting the deficit to stand at $47.5 billion.
Wholesale inventories unexpectedly declined 0.2% in June. Economists were looking for a 0.3% increase.
Companies: Wendy's ( ) reported a $5.5 million loss for the second quarter, but the fast food chain's stock moved higher as sales at restaurants open at least 15 months rose 3.2% during the quarter.
Kohl's (Fortune 500) posted second-quarter results that beat estimates, but sales were weaker than expected, sending shares lower. The retailer cut its forecast for the quarter and said it expects same-stores sales growth during the quarter to be flat to 2%.,
Shares of Monster Beverage () dropped after the energy-drink company delivered lower-than-expected earnings and revenue figures.
High-end retailer Nordstrom (Fortune 500) is scheduled to report after the closing bell.,
Cisco (Fortune 500) shares rose after Piper Jaffray analyst Troy Jensen raised his rating on the stock to Overweight from Neutral, and boosted his price target to $22 from $20. Cisco is slated to report fourth-quarter results next week.,
Shares of A123 Systems () gained after the battery maker said that Chinese auto parts maker Wanxiang Group is going to invest $450 million in the company, a step that that CEO David Vieau said helps "remove the uncertainty regarding A123's financial situation."
E*Trade's (Steven Freiberg was ousted and its board is seeking a new leader. The company's chairman Frank Petrilli will serve as interim CEO.) stock climbed after the company announced that CEO
British soccer team Manchester United is expected to price the shares of its initial public offering Thursday night and begin trading on the New York Stock Exchange Friday under the symbol "MANU."
Oil for September delivery rose 1 cent to $93.36 a barrel.
Gold futures for December delivery rose $4.20 to $1,620.20 an ounce.
Bonds: The price on the benchmark 10-year U.S. Treasury fell, pushing the yield up to 1.69% from 1.64% late Wednesday.
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