NEW YORK (Reuters) - U.S. stocks edged up on Thursday, after a report that Merrill Lynch & Co does not need to raise more capital eased fears of a deeper credit crisis and offset concern that monthly jobs data would point to a recession.
Technology shares rose after strong results from Research in Motion RIM.TO RIMM.O, the maker of the BlackBerry device, defied expectations of a slowdown in business and consumer spending. RIM shares jumped 5.9 percent to $122.58.
Merrill Lynch shares rose 1.2 percent as optimism mounted that Wall Street’s write-downs for bad assets may have peaked after Japan’s Nikkei newspaper reported the brokerage’s chief executive said it has no plans to raise fresh capital.
Earlier this week, the market rallied sharply after solid demand for a Lehman Brothers LEH.N share offering quelled fears the investment bank was headed toward a fate similar to that of Bear Stearns BSC.N and raised optimism that the worst of the credit crisis may be over.
“Markets are starting to pay more attention to any indication that what caused the slowdown is no longer as relevant as what it was six months ago,” said Peter Kenny, managing director at Knight Equity Markets in Jersey City, New Jersey.
The Dow Jones industrial average .DJI rose 20.20 points, or 0.16 percent, to end at 12,626.03. The Standard & Poor's 500 Index .SPX gained 1.78 points, or 0.13 percent, to 1,369.31. The Nasdaq Composite Index .IXIC advanced 1.90 points, or 0.08 percent, to 2,363.30.
In the tech sector, shares of Apple Inc (AAPL.O), maker of the popular iPhone, led the S&P 500 and rose 2.8 percent to
Cisco Systems Inc (CSCO.O), however, fell 2.9 percent after a UBS analyst downgraded his rating on the maker of routers and switches to “neutral” from “buy.”
Metal prices rose as the dollar edged lower, boosting shares of Alcoa (AA.N), the world’s largest supplier of aluminum. Alcoa was the top gainer in the Dow and jumped 5.8 percent to $38.54.
Stocks dipped earlier in the session after government data showed claims for unemployment benefits rose last week to their highest level in two and a half years. The data was particularly disturbing coming a day ahead of the March U.S. employment report.
“We went from a pretty weak open on fairly weak economic data to positive. The market is looking ahead and is anticipating the evolution of stronger growth,” said Michael Darda, chief economist at MKM Partners LLC, in Greenwich, Connecticut.
One group that appeared to have been betting on a turning point in the battered financial sector was institutional investors.
Data from State Street Global Markets showed institutional investors, who usually make long-term bets, for the last month have been heavily buying shares in the financial services sector.
“Institutional investors are being contrarian and buying stocks that have been shunned. It is a slightly more constructive approach to a challenging environment than portentous predictions of doom,” State Street analysts said in a note.
Trading was low on the New York Stock Exchange, with about 1.3 billion shares changing hands, below last year’s estimated daily average of roughly 1.9 billion, while on Nasdaq, about 2 billion shares traded, below last year’s daily average of 2.17 billion.
Advancing stocks outnumbered declining ones on the NYSE by 3 to 2 while decliners beat advancers on the Nasdaq by about 14 to 13.
Editing by Leslie Adler