Economic news offsets tech troubles

Stocks rose modestly in uninspired trading Thursday as investors looked past a mix of economic data and falling profit forecasts from from Google Inc. and Applied Materials Inc.

While Applied Materials’ forecasts were understandable given high inventories in semiconductors, Google’s warning that its current strong profits were unsustainable in future quarters surprised some investors.

Wall Street was cheered, however, by the Labor Department’s report on first-time unemployment claims, which fell by 3,000 to 334,000 last week, the lowest level since the end of October. And while trading remained sluggish and the market’s gains were minimal, investors and analysts remained bullish.

“Really, we’re just not doing much today,” said Scott Wren, equity strategist for A.G. Edwards & Sons. “It’s fine to take a little break, but overall, the market will continue to go up, and I do think that tech CEOs and tech analysts are a little overly pessimistic. The economy will continue to grow through 2005, and so will tech earnings.”

The Dow Jones industrial average gained 22.98, or 0.22 percent, to 10,572.55.

Broader stock indicators were narrowly higher. The Standard & Poor’s 500 index was up 1.61, or 0.14 percent, at 1,183.55, while the Nasdaq composite index gained 4.60, or 0.22 percent, to 2,104.28. The Nasdaq closed above 2,100 for the first time since Jan. 27.

Stocks also saw pressure from the currency markets, as the U.S. dollar fell to a new low against the euro as foreign exchange traders worried about the U.S. trade and budget deficits, along with high oil prices. A barrel of crude oil closed at $46.22, down 62 cents, on the New York Mercantile Exchange.

The Conference Board said its index of leading economic indicators, which measures the potential growth of the economy, fell for the fifth straight month in October. The index dropped 0.3 percent, more than the 0.1 percent Wall Street expected.

“The economic data today was a little weaker than expected, but investors remain upbeat about the market right now,” said Michael Sheldon, chief market strategist at Spencer Clarke LLC. “The market is somewhat overbought on a short-term basis, but any pullback will be shallow and short lived.”

Declining issues barely outnumbered advancers on the New York Stock Exchange, where preliminary consolidated volume came to 1.9 billion shares, compared with 2.16 billion on Wednesday.

The Russell 2000 index of smaller companies was down 0.91, or 0.15 percent, at 622.06.

Overseas, Japan’s Nikkei stock average fell 0.44 percent. In Europe, Britain’s FTSE 100 closed up 0.2 percent, France’s CAC-40 dropped 0.36 percent for the session, and Germany’s DAX index lost 0.11 percent.