Gains in financials, material stocks lift market

NEW YORK -- Investors found appetite for risk Thursday after a jittery week.

The gains were tempered by weak sales reports from retailers and evidence that the labor market is still hurting. Major indexes rose less than 1% in afternoon trading.

Money moved into more economically sensitive sectors such as technology, banks and energy, which stand to gain more if a recovery takes hold, and out of defensive shares such as drug makers and utilities — a positive sign for a market that has been losing hope for a quick recovery.

At the close of trading, the Dow Jones industrial average was up 4.76, or 0.06%, to 8,183.17. In the broad market, the Standard & Poor's 500 rose 3.12, or 0.35%, to 882.68, and the Nasdaq composite index rose 5.38, or 0.31%, to 1,752.55.

After an ebullient rally in March and April that drove market indicators up as much as 40%, stocks started to falter in mid-June as several grim economic reports suggested that a recovery was much further away than anticipated. Major market indexes are down about 7% since June 12.

In other signs of willingness to take on more risk, Treasury bond prices fell sharply as their safe-haven appeal eroded, and a measure of stock market volatility fell.

Alcoa's results were a pleasant surprise to investors who are looking closely for corporate earnings to bolster their now-fading hopes that the economy is on the mend.

Analysts expect the market to continue to drift until investors have a clearer picture from companies of where the economy is headed.

"A lot of people are sitting back, waiting to see if companies are making money," said Tommy Williams, president of Williams Financial Advisers in Shreveport, La.

Despite the small gains Thursday, the market remains highly skeptical. There is plenty of evidence on hand, including weak retail sales and record high unemployment, to suggest any rebound in growth could be feeble and take longer than investors originally thought.