Stocks capped a shortened trading week with a mixed finish Thursday after some uneven economic data: news of a contraction in the nation's services sector and a tame reading on employment.
The Dow Jones industrial average showed a sizable advance, while the broader indexes ended mixed. The stock market closed early ahead of the Fourth of July holiday.
The Institute for Supply Management said its index of service sector activity fell to 48.2 from 51.7 in May. That news touched off more misgivings about the well-being of the economy.
The look at the service sector follows a largely as-expected report from the Labor Department, which said the nation's unemployment rate held steady at 5.5% last month. The government also reported that 62,000 jobs were lost in June, but that number was close to economists' forecasts.
The jobs report appeared to assuage some worries that the snapshot of the labor market would be more grim. Employment numbers are critical because consumers who are out of work or are nervous about losing their job are likely to cut their spending. They've already become cautious because of higher food and energy prices.
Christopher Molumphy, chief investment officer at Franklin Templeton fixed income group, said the employment figures don't point to a labor market in distress. "We are not seeing data that would be consistent with recessionary conditions," he said.
He also said volatility in Thursday's shortened session wasn't unexpected. Low trading volume and liquidity can skew price movements.
"Unusual short-term volatility should and would not be unexpected," Molumphy said. "Frankly, we try not to overanalyze some of the moves because I think you can easily do that."
The Dow rose 73.03, or 0.65%, to 11,288.54.
Broader stock indicators ended mixed. The Standard & Poor's 500 index rose 1.38, or 0.11%, to 1,262.90, and the Nasdaq composite index fell 6.08, or 0.27%, to 2,245.38.
Declining issues outnumbered advancers by about 2 to 1 on the New York Stock Exchange, where volume came to 931.9 million shares.
Inflation concerns remained as the price of oil neared $146 for the first time. Light, sweet crude rose 6 cents to $143.63 per barrel on the New York Mercantile Exchange but earlier rose as high as $145.85.
Investors also examined the European Central Bank's decision to raise interest rates for the first time in more than a year. The bank's concerns about rising prices in the 15 nations that use the euro prompted the quarter-point increase in the key rate to 4.25%.
Bond prices fell. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3.98% from 3.96% late Wednesday.
The dollar was mixed against other major currencies, while gold prices fell.
Investors are nervous about the strength of the job market in part because consumer spending accounts for more than two-thirds of U.S. economic activity. Consumers who are out of work or are nervous about losing their job are likely to trim their spending.
The employment report, while greeted with some relief, also brought some troubling insights. The nation's job losses in April and May were revised and were steeper than had been thought. A separate report showed that the number of newly laid off people seeking unemployment benefits jumped last week.
The look at the labor market comes as both consumers and businesses are grappling with surging fuel prices. Energy costs have dominated trading in recent weeks. Nearly a month ago, on June 6, oil prices logged their biggest-ever one-day advance with a gain of nearly $11 a barrel. The rise that day to more than $138 a barrel and a nearly 400-point drop in the Dow at the time owed in part to comments from a Morgan Stanley analyst that oil would hit $150 a barrel by the Fourth of July.
To determine where the market is headed, investors will be looking at the start of quarterly earnings reports next week. Aluminum producer Alcoa, a component of the Dow industrials, is expected to unofficially kick off earnings season with a report due Tuesday.
Molumphy said he expects the stock market could show some signs of stabilizing following a tumultuous June and said retail sales reports due next week could give investors important insights.
"We will be looking at some of the retail numbers for June, which should give us a better indication of the consumer. The consumer is still ultimately the key of the economy."
The Russell 2000 index of smaller companies fell 6.56, or 0.98%, to 665.78.
Overseas, Japan's Nikkei stock average fell 0.16%. Britain's FTSE 100 rose 0.14%, Germany's DAX index rose 0.77%, and France's CAC-40 rose 1.11%.