NEW YORK (Reuters) - Stocks ticked higher on Thursday after a labor market report indicated the economy was slowly recovering, but the data wasn't enough for the S&P 500 to significantly extend recent gains.
The broad index is approaching levels not seen since before the 2008 financial crisis.
Equities have rallied more than 8 percent so far this year, and more than 20 percent from lows reached in October. But investors believe further gains are limited as the S&P flirted with the 1,360 level, its highest since last May.
The index has been unable to break convincingly above the level in the past several sessions. While a solid break above 1,360 could trigger more gains, the likelihood of a pullback increases with each failed attempt.
"In addition, there are big concerns about what impact rising crude prices could have on the consumer, as well as recession fears in Europe. That could take us lower."
The Dow Jones industrial average <.DJI> was up 42.65 points, or 0.33 percent, at 12,981.32. The Standard & Poor's 500 Index <.SPX> was up 3.90 points, or 0.29 percent, at 1,361.56. The Nasdaq Composite Index <.IXIC> was up 18.26 points, or 0.62 percent, at 2,951.43.
In a sign the labor market was improving, new U.S. claims for unemployment insurance held at the lowest level since the early days of the 2007-2009 recession.
Data from another key sector of the economy also suggested improvement.
U.S. crude futures rose 0.7 percent, extending recent gains that have taken them up 8.6 percent so far this month. Oil service shares <.OSX> were modestly higher after gaining 1.7 percent Wednesday.
Hewlett-Packard Co <HPQ.N> shed 4.8 percent to $27.56 and was the biggest drag on the Dow. Late Wednesday, the world's No. 1 computer maker posted a sharp decline in earnings and warned it would take several years to turn around its sprawling businesses.
Kohl's Corp <KSS.N> slid 4.6 percent to $49.77 after the department store chain issued a 2012 profit that missed estimates.
Fellow retailer Target Corp <TGT.N> gained 1.3 percent to $53.66 after reporting a higher-than-expected profit.
Sears Holdings Corp <SHLD.O> jumped 21 percent to $63.03 on its plan to separate its Sears Hometown and Outlet Businesses and certain hardware stores.
The S&P retail index <.RLX> rose 0.6 percent.
According to Thomson Reuters data through Thursday morning, of the 446 companies in the S&P 500 that have reported earnings, 63 percent topped analysts' expectations.
Vivus Inc <VVUS.O> surged 87 percent to $19.74 after the drugmaker's weight loss pill got a favorable review from a regulatory advisory panel.