Stocks trudge back, but still lower in midday trading

By msnbc.com staff and news services

Stocks trimmed some of their losses entering early afternoon Thursday, after news about an increase in unemployment claims sunk the market earlier in the day.

Just after 12:30 p.m. on Wall Street, the Dow Jones industrial average was off 0.14 percent. The S&P 500 was down 0.03 percent. The Nasdaq was up 0.23 percent.

Thursday's slight decline is the latest in a series of small moves in the stock market. There have been six consecutive days with moves of less than 1 percent in the S&P 500, the quietest stretch since May.

Ralph Fogel, investment strategist and partner at Fogel Neale Partners in New York, said the moderate moves in the market were a healthy sign following the steep rises and sudden declines that were typical of last summer. "This is a much healthier market than we've seen."

Weekly unemployment benefits spiked last week to the highest level in six weeks, mostly because companies let go of thousands of holiday hires, the government reported. Retail sales barely rose in December and were lower than analysts were expecting.

European markets mostly rose after Italy and Spain held highly successful bond auctions, easing worries about Europe's debt crisis. Italy's benchmark stock index rose 2 percent.

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In Italy's first bond auction of the new year, the country was able to sell one-year bonds at a rate of just 2.735 percent, less than half the 5.95 percent rate it had to pay last month. That's a signal that investors are becoming more confident in Italy's ability to pay its debts.

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Spain was able to raise double the amount of money it had sought to raise in its own bond sale as demand for its debt was strong. Both auctions were seen as important tests of investor sentiment.

Investors have been worried that Italy and Spain, the third- and fourth-largest countries in the euro area, might get dragged into the region's debt crisis. Greece, Ireland and Portugal have been forced to get relief from their lenders after their borrowing costs spiked to levels the countries could no longer afford.

The Associated Press contributed to this report.