Stocks mixed on jobs, rising oil prices

Stocks were mixed Thursday as investor enthusiasm over a sharp drop in initial unemployment claims was offset by rising oil prices and a disappointing wholesale inventories report. Technology shares benefited from a pair of outlook upgrades and strong earnings from National Semiconductor Corp.

Investors grew more cautious through the session as oil prices climbed, topping the $44 per barrel mark after weeks of declines. A barrel of light crude rose $1.84 to settle at $44.61 a barrel on the New York Mercantile Exchange.

Wall Street was also disappointed by the Commerce Department’s report on wholesale inventories, which rose 1.3 percent in July, double what economists had expected. Wholesale sales rose by only 0.5 percent — which means that business and consumer spending has trailed off and more products are sitting in warehouses.

“We’re starting to see some real evidence of softness in consumer spending,” said Russ Koesterich, U.S. equity strategist for State Street Corp. in Boston. “I don’t think the economy is falling off a cliff. It’s chugging along at a moderate pace, but will it be enough to keep corporate profits where they need to be? That’s the question.”

Improvements in the nation’s job picture could help spur consumers. The Labor Department reported 319,000 new unemployment claims for the past week, down 44,000 from a week ago. It was the lowest level of first-time claims since July.

According to preliminary calculations, the Dow Jones industrial average was down 24.26, or 0.2 percent, at 10,289.10.

Broader stock indicators were markedly higher. The Nasdaq composite index was up 19.01, or 1 percent, at 1,869.65, while the Standard & Poor’s 500 index gained 2.11, or 0.2 percent, to 1,118.38.

The economic data will likely weigh heavily on the Federal Reserve as it prepares to meet Sept. 21 to discuss another hike in the nation’s benchmark interest rate, which currently stands at 1.5 percent. The improved jobs picture increases the chances that the Fed will raise rates by a quarter percentage point, even though raising rates in the midst of an election can sometimes weigh on the presidential incumbent.

Advancing issues outnumbered decliners by more than 3 to 2 on the New York Stock Exchange, where volume came to 1.36 billion shares, compared to 1.25 billion on Wednesday.

The Russell 2000 index of smaller companies was up 8.39, or 1.5 percent, at 566.18.

Overseas, Japan’s Nikkei stock average dropped 1 percent. In Europe, Britain’s FTSE 100 closed down 0.5 percent, France’s CAC-40 lost 0.7 percent for the session and Germany’s DAX index fell 0.9 percent.

Officials at the Nasdaq Stock Market and the American Stock Exchange will halt to trading from 11 a.m. to 11:01 a.m. on Friday to observe a minute of silence in memory of the victims of the Sept. 11 attacks. Nasdaq will also place commemorative displays on its Marketsite building in Times Square on Friday and Saturday.