Stocks claw out gains

The Dow Jones industrial average (INDU) climbed 46 points, or 0.4%, the S&P 500 (SPX) added 5.5 points, or 0.5%, and the Nasdaq (COMP) gained 10 points, or 0.4%.

After rallying for a fourth straight week last week, stocks slipped from 4-month highs and ended the day lower Monday amid a flurry of deal-making activity and ongoing economic jitters.

Despite a disappointing report on consumer morale early Tuesday that initially sent stocks tumbling, investors haven't given up hope that a recovery is gradually gaining pace, said Mark Luschini, chief investment strategist at Janney Montgomery Scott.

"The sentiment is that economic data has not necessarily improved significantly from summer months, rather it has stopped showing signs of deterioration," said Luschini. "But that's enough for some people to suggest that the risk of a double-dip recession is receding."

Economy: The Consumer Confidence Index dropped to 48.5 in September from a downwardly revised 53.2 in August, the Conference Board reported. Economists had been expecting the number to edge to 53. The index is a far cry from 90 -- a level that typically indicates a stable economy.

"This is further evidence that the consumer is still not feeling particularly upbeat about what they see going on in the market or in the foreseeable future, which obviously impacts their spending behavior," said Luschini. "That's enough to hold markets back."

The Case-Shiller 20-city home price index showed home prices inched up 0.6% in July compared with June, according to the S&P/Case-Shiller 20-city home price index. On a year-over-year basis, prices rose 3.2% compared with July 2009. Experts polled by Briefing.com had forecast a year-over-year rise of 3.3%.

"It wasn't robust, but the [reading] represents more normalized traffic coming into the market, which is helping to put a floor into housing prices," said Luschini. "It's too soon to suggest a recovery in the housing market, but this at least suggests we're bringing some stability to this beleaguered but critical area of the economy."

Stuck in a rut?: While a double-dip recession may be becoming less of a concern, it's going to take more than a slew of lackluster economic readings to push the market significantly higher, said Ron Kiddoo, CIO at Cozad Asset Management.

"We've had a good move up this month and economic readings have been slowly getting better," he said. "But we still need to see much better economic numbers, and that just isn't happening."

With midterm elections around the corner and as investors await the government's closely-watched jobs report on tap next week, political and economic uncertainty is likely to keep stocks in a tight trading range.

"I don't expect [economic] numbers to get a lot better for a while, which could mean the remainder of the calendar year," said Kiddoo. "Attempts of government spending and bringing in jobs aren't working and businesses are spending a lot of cash and doing well but are afraid to invest because they don't know what the future is going to bring in terms of taxes and legislation."

Companies: AOL (AOL) shares gained nearly 3% after the media giant announced plans to acquire news outlet TechCrunch.

Shares of Barnes & Noble (BKS, Fortune 500) closed slightly higher after the bookseller said shareholders rejected investor Ronald Burkle's bid to expand his ownership of the company.

Meanwhile, BlackBerry maker Research in Motion (RIMM) on Monday unveiled the PlayBook, a new tablet computer to compete with Apple's (AAPL, Fortune 500) iPad.

Shares of RIM slipped 3% Tuesday, and the stock is down about 30% this year due to concerns that the company is falling behind Apple, as well as smartphone makers using Google's (GOOG, Fortune 500) Android operating system.

Shares of Walgreens (WAG, Fortune 500) surged more than 11% after the drugstore chain reported its fiscal fourth-quarter revenue rose 7.4% to a record $16.9 billion, driven by strong prescription drug sales. The company's quarterly earnings rose 7.8% to $470 million, or 49 cents per share.

World markets: European stocks ended mixed. Britain's FTSE 100 edged up 0.1%, France's CAC 40 lost 0.1%, and Germany's DAX was flat.

Early Tuesday, European markets tumbled after a Spanish newspaper pointed out that Moody's deadline for reviewing its investment grade AAA credit rating for Spain runs out this week. The country could be facing a downgrade due to its sovereign debt troubles.

Asian markets ended the session in negative territory. Japan's Nikkei and the Hang Seng in Hong Kong each lost more than 1%. The Shanghai Composite fell 0.6%.

Currencies and commodities: The dollar fell against the euro and the Japanese yen, but rose versus and British pound.

Gold futures for December delivery surged $9.70 to settle at a new record of $1,308.30 an ounce, after hitting an all-time intraday trading high of $1,311 earlier Tuesday.

The price of crude oil for November delivery fell 34 cents to settle at $76.18 per barrel.

Bonds: Prices for U.S. Treasurys rose, with the yield on the 10-year note falling to 2.47% from 2.53% late Monday. Bond prices and yields move in opposite directions. 

Stocks drop from 4-month highs

The Dow Jones industrial average (INDU) slipped 48 points, or 0.4%, the S&P 500 (SPX) ticked down 6.5 points, or 0.6%, and the Nasdaq (COMP) lost 11 points, or 0.5%.

Wall Street has been on a nice tear lately, as economic readings have started convincing investors that the recovery is gaining ground. U.S. stocks soared to their highest levels in four months Friday, and are still poised to end September with the biggest monthly gains in more than a year.

"The tone of economic news has gotten significantly stronger over the last four to six weeks," said Phil Orlando, chief equity strategist at Federated Investors. "This has provided investors with greater confidence that what we experienced over the summer months was simply an economic soft patch rather than the start of a double-dip recession."

With little on the economic calendar Monday, investors are soaking in the advances from the previous week and focusing on deals announced by Southwest Airlines, Wal-Mart and Unilever.

"We do have a very aggressive [merger and acquisition] cycle, and that's good for the market," he said. "But the market doesn't go up 2% every day, so right now we're just nursing a hangover."

Economy: As the market nurses its hangover, there's still plenty for investors to worry about, said Joseph Saluzzi, co-head of equity trading at Themis Trading.

With the government's seizure of three credit unions on Friday and Moody's downgrade of Anglo Irish Bank on Monday, the health of global financial institutions remains a huge concern, he said.

"The government bailing out those credit unions shows that toxic assets are still on the books, there are still things being hidden and nobody know's what's going on," he said. "And the concern about European sovereign debt is tremendous -- all those countries are connected, so if one is required to be bailed out, it's going to affect everyone else."

And while declines were generally broad-based Monday, financial stocks took a hit, with industry leaders JPMorgan Chase (JPM, Fortune 500) and Bank of America (BAC, Fortune 500) sliding more than 1%.

"People have been thinking it's all fixed but we've still got a long way to go," Saluzzi said.

Painfully high unemployment, home prices and the government's enormous deficit are other issues still weighing on the minds of investors, he said.

Companies: Southwest Airlines (LUV, Fortune 500) announced a $1.4 billion offer for AirTran Holdings (AAI), the parent company of AirTran Airways. The bid amounts to a 69% premium over AirTran's Friday closing price. The announcement sent AirTran stock surging 61%, while shares of Southwest rose 9%.

Shares of Wal-Mart (WMT, Fortune 500) slipped 1% after the company bid to acquire Johannesburg-based retailer Massmart Holdings Limited for roughly $4 billion. Massmart operates 290 stores in 13 countries in Africa. A deal has not yet been agreed to.

Consumer goods giant Unilever said it is buying Alberto Culver (ACV), manufacturer of the Tresemme and Noxzema brands, for $3.7 billion. Shares of Alberto Culver jumped 20%, while Unilever (UN) shares edged up 1%.

While deal-making activity tends to boost the market, Saluzzi said that the recent flurry of mergers and acquisitions should make investors wary.

"[Mergers and acquisitions] are destroyers of jobs, not creators of jobs," he said. "So I don't buy it that these are a good thing."

Meanwhile, Progress Energy (PGN, Fortune 500) tripped a circuit breaker, causing trading of the energy company to pause for five minutes after shares briefly plunged 90%.

After the market close, BlackBerry maker Research in Motion (RIMM) announced plans for PlayBook, a new tablet computer to compete with Apple's iPad. Shares of the company jumped more than 1% in after-hours trading.

World markets: European stocks ended lower. Britain's FTSE 100 fell 0.5%, Germany's DAX slid 0.3% and France's CAC 40 dropped 0.4%.

Currencies and commodities: The dollar rose against the euro and the Japanese yen, but fell versus the British pound.

The price of oil for November delivery edged up 3 cents to settle at $76.52 per barrel.

Gold futures for December delivery surged to a new record, settling at $1,298.60 an ounce. On Friday, gold hit a new intra-day record of $1,301.60.

Bonds: The yield on the 10-year Treasury note fell to 2.53% from 2.61% late Tuesday. 

Stocks end with a late-stage slide

Stocks slump, gold surges

Stocks rally to 4-month highs

The Dow Jones industrial average (INDU) gained 146 points, or 1.4%, to end at 10,753, its highest close since mid-May. The tech-heavy Nasdaq (COMP) rallied 40 points, or 1.7%, to finish at 2,355.

The S&P 500 (SPX) added 17 points, or 1.5%, to close at 1,142. The index crossed 1,130, a key technical level watched closely by analysts, early in the session and continued to surge in the afternoon to cross the next short-term technical level of 1,140.

"The S&P has tried to sit above the 1,130 level in June, August and last week but failed, so the fact that it has broken up above that point and is staying there is considered a positive sign for the bulls and forcing traders to come back in," said Donald Selkin, chief market strategist at National Securities.

Trading has been choppy on Wall Street recently as investors look for solid signs pointing to a sustained recovery.

Buying picked up steam Monday after the National Bureau of Economic Research, the independent body of economists in charge of dating when recessions begin and end, announced that the 18-month Great Recession officially ended in June 2009.

"I think it was known that the recession ended then, but maybe the official announcement gives people some needed assurance," said Selkin.

Meanwhile, investors also took in a housing report showing homebuilder confidence is stuck at an 18-month low.

Economy: A report from the National Association of Home Builders -- the first of a number of readings on the housing market due out this week -- showed builder confidence for newly built single-family homes remained steady in September, after falling for three consecutive months.

The NAHB's Housing Market Index was unchanged at 13. Economists surveyed by Briefing.com were expecting builder sentiment index to edge up to 14.

Data on housing starts and building permits in August come out Tuesday, while reports on new and existing home sales are slated for release later in the week.

Fed: Investors will also be watching the Federal Reserve's announcement on interest rate policy Tuesday. The central bank is widely expected to hold rates steady, but investors will parse the Fed's policy statement for clues on the economic outlook.

Companies: Against the backdrop of housing data due out this week, two major homebuilders are also releasing their latest earnings reports.

Lennar (LEN) reported $825 million in revenue -- a 14% rise over the year-earlier quarter. Profit was $30 million, or 16 cents per share, well above analysts' forecasts of 4 cents per share on $760.2 million in revenue. Shares of Lennar rose 8.2%.

Rival homebuilder KB Home (KBH) will report earnings on Friday.

IBM (IBM, Fortune 500) announced Monday that it plans to acquire data storage company Netezza (NZ) for $27 per share, or about $1.7 billion. Netezza shares rose 15%.

In another tech merger, shares of Nu Horizons Electronics (NUHC) more than doubled to $6.90 on news that Arrow Electronics (ARW, Fortune 500) will buy the company for $7 a share.

Verizon Communications (VZ, Fortune 500) named Lowell McAdam as its president and chief operating officer, putting him second in line to Chairman and CEO Ivan G. Seidenberg. Shares were up 1.3%.

BP (BP) announced Sunday that its Macondo well in the Gulf of Mexico has been cemented shut and is "effectively dead." The well ruptured 5 months ago, causing the worst oil spill in U.S. history. BP's stock rose about 1.7%.

Spirit Airlines filed for an initial public offering with the Securities and Exchange Commission.

World markets: European shares closed with strong gains. Britain's FTSE 100 jumped 1.7%, the CAC 40 in France rose 1.8%, and Germany's DAX added 1.4%.

In Asia, the Hang Seng ended modestly higher, while the Shanghai Composite edged lower. Japanese markets were closed for a holiday.

Currencies and commodities: The dollar fell against the euro and the Japanese yen, but rose slightly against Britain's pound.

Oil futures for October delivery gained $1.20 to settle at $74.86 a barrel. The October contract is slated to expire at the end of trade Tuesday, with volume already picking up in the November contract.

Gold for December delivery rose $3.30 to settle at an all-time high of $1,280.80 an ounce. Earlier, it hit an intra-day high of $1,285.20 an ounce.

Bonds: The price on the 10-year Treasury note was slightly higher, pushing down the yield to 2.71% from 2.75% late Friday.  

Stocks stuck in a rut

On Thursday the Dow Jones industrial average (INDU) rose 22 points, or 0.2%, to end at 10,594.83. The S&P 500 (SPX) was flat at 1,124.66 and the Nasdaq (COMP) added 2 points, or less than 0.1%, to close at 2,303.25.

Indexes had been down slightly for most of the day, but they rose modestly in the last hour of trade. Banking, energy and housing shares ended mostly lower, while tech and retail shares turned higher.

September is a historically down month for stocks -- but they started out the strong, with a rally in the first three trading days as the government's monthly jobs report showed improvement. As more data have come out this month, though, movement has slowed.

"We're entrenched in the same patterns recently," said Stephen Carl, head equity trader at Williams Capital Group. "Data aren't pushing us one way or the other."

Investors remained nervous Thursday about Japan's intervention in the currency market. On Tuesday, the nation's government said it would buy up yen in an attempt to curb deflation.

The yen purchase boosted the U.S. dollar, which helped lift stocks Wednesday. But it also kept uncertainty about the recovery at the forefront of investors' minds, sending gold prices to new record highs. The precious metal is considered a "safe" spot to park cash during times of uncertainty.

Economy: The Labor Department's weekly report on initial jobless claims showed 450,000 people filed for first-time unemployment benefits last week. Economists expected 460,000 new claims.

Initial claims have been stuck in a tight range since November, and economists say there's little reason to celebrate the recovery until weekly claims head below the 400,000 mark.

The producer price index also came out before the bell. The reading of inflation at the manufacturing level rose 0.4% in August, versus an increase of 0.2% the prior month.

RealtyTrac said the number of homeowners falling behind on their loans -- enough to attract initial notices of default -- fell 30% in August. The lower rate should translate into fewer people losing their homes, but the report also showed lenders repossessed a record 95,000 homes last month.

The Philadelphia Fed Index showed the region's manufacturing activity contracted slightly in September, due to a drop in new orders. But hiring has picked up this month.

The Senate passed a $42 billion bill aimed at helping small businesses. The Senate's version of the Small Business Jobs Act will now have to go back to the House, where it's expected to pass, before President Obama can sign it into law.

Companies: FedEx (FDX, Fortune 500) said it expected to see moderate growth in the global economy, but the shipping company will still cut 1,700 jobs.

FedEx, which is considered a bellwether for the global economy, also reported fiscal first-quarter earnings of $1.20 a share. That's a penny below analysts' estimates, but still up 57 cents from a year earlier. The company raised its outlook but that still fell short of forecasts. FedEx shares fell to end 3.8% lower.

Boeing said the airline industry will need to hire more than 460,000 pilots and almost 600,000 maintenance workers over the next 20 years, to meet growing demand in the airline industry. The company predicted the industry as a whole will need to hire more than one million workers over the same time period.

Microsoft (MSFT, Fortune 500) said its new video game "Halo: Reach" earned $200 million in sales on its launch day. The company will start selling Kinect, a full-body motion-sensing game system, on November 4.

After the bell, Oracle (ORCL, Fortune 500) reported a quarterly profit and sales that beat Wall Street's forecasts. The corporate software company said its net income in its fiscal first quarter rose to $1.4 billion, or 27 cents per share, up 20% from a year earlier. Sales rose 48% to $7.5 billion.

Oracle shares rose 3% in after-hours trade.

BlackBerry maker Research in Motion (RIMM) reported quarterly profit that beat analysts expectations and issued an upbeat forecast. The Canadian company reported net income of $796.7 million, or $1.46 per share in its fiscal second quarter. Sales increased 31% over the quarter to $4.62 billion.

The figures easily topped estimates, and RIM shares surged 8% in after-hours trade.

World markets: Asian markets closed lower. Japan's benchmark Nikkei index fell 0.1%, and Hong Kong's Hang Seng index fell 0.2%. The Shanghai Composite sunk 1.9%.

European shares ended lower. The CAC 40 in France lost 0.5%, Germany's DAX fell 0.2%, and Britain's FTSE 100 slipped 0.3%.

Currencies and commodities: The dollar fell against the euro and the Japanese yen, but posted slight gains against Britain's pound.

Oil futures for October delivery fell $1.45 to settle at $74.57 a barrel.

Gold futures for December delivery jumped to a fresh record intraday high early Thursday of $1,279.50 an ounce. That trumps the previous intraday record of $1,276.50 an ounce, which was just set on Tuesday.

The precious metal also hit a settlement record, closing at $1,273.60 an ounce. Gold has gained traction as investors turn to it as a "safe haven" play in times of economic uncertainty. For that reason, the precious metal is an indicator of investor sentiment.

Bonds: The yield on the 10-year Treasury note rose to 2.76% from 2.72% late Wednesday.  

Stocks end higher on dollar moves

The Dow Jones industrial average (INDU) rose 46 points, or 0.4%, to close at 10,572.73. The Nasdaq (COMP) added 12 points, or 0.5%, to end at 2,301.32, and the S&P 500 (SPX) ticked up 4 points, or 0.4%, to settle at 1,125.07.

Foreign exchange rates were in the spotlight after the Japanese government's first jump into the currency market since 2004. The yen rose to a fresh 15-year high against the dollar Tuesday, prompting recently re-elected Japanese Prime Minister Naoto Kan to announce the nation will sell yen and buy dollars. The move boosted the dollar Wednesday.

Stock trading has been choppy over the past few sessions as investors searched for a catalyst to spur buying. All three indexes opened modestly lower Wednesday, but analysts expected more volatility with little on the docket to push stocks one way or another.

"Today's reports underwhelmed, but they weren't far off the mark," said Mark Luschini, chief investment strategist at Janney Montgomery Scott. "There's no big data pushing a major move either higher or lower."

Stocks ended mixed Tuesday, as a recent rally on Wall Street ran out of steam. Investors welcomed a slightly better-than-expected report on U.S. retail sales, but the Dow and S&P 500 both closed lower.

Spotlight on manufacturing: The manufacturing sector has expanded for 13 straight months, making it a bright spot against a backdrop of fears of a slower recovery. A report released earlier this month showed activity grew well beyond expectations in August.

However, two manufacturing reports released Wednesday just missed experts' predictions.

The Federal Reserve Bank of New York said business conditions in New York state remained positive in September, although activity slowed from August.

Also on Wednesday, the Commerce Department said industrial production rose 0.2% in August, below the 0.3% gain expected by economists. Capacity utilization fell to 74.7%, from a downwardly revised 74.8%.

Coming up Thursday, the Philadelphia Fed will release its regional manufacturing data.

Economy: The government said U.S. import prices increased 0.6% in August, driven by rising gas prices. Export prices rose 0.8% in the month.

Former Fed chairman Alan Greenspan called for the government to raise taxes in a speech before the Council on Foreign Relations in New York.

Companies: MasterCard (MA, Fortune 500) shares gained to end 5.3% higher. The company said it expects its net income to rise at least 20% this year, due to a decline in expenses and favorable foreign exchange rates.

Novell (NOVL) shares rose to end up almost 6% on unconfirmed talk that the network software company is preparing to sell itself in two parts.

World markets: European shares ended lower. The CAC 40 in France fell around 0.4%, Germany's DAX slipped 0.1%, and Britain's FTSE 100 was 0.2% lower.

Asian markets ended mixed, with Japan's benchmark Nikkei index surging 2.3% on the back of the yen intervention. The Hang Seng in Hong Kong rose 0.1% and the Shanghai Composite fell 1.3%.

Currencies and commodities: The dollar rose against the euro and the British pound, and surged more than 2.5% against the Japanese yen.

Oil futures for October delivery fell $1 to $75.80 a barrel. A report late Tuesday from the American Petroleum Institute showed an unexpected increase in crude supplies last week, while the more closely watched inventory report from the Energy Information Administration showed that supplies fell.

Gold for December delivery eased $3 to settle at $1268.70. On Tuesday, the December contract settled at a record high of $1,271.70.

Bonds: The yield on the 10-year Treasury note rose to 2.72% from 2.67% late Tuesday. 

Stocks end mixed after choppy day

Stocks: Investors find reason to cheer

Stocks fall on European bank woes

All three indexes fell about 1%. The Dow Jones industrial average (INDU) fell 107 points to 10,341, the S&P 500 (SPX) slipped 13 points to close at 1,092 and the Nasdaq (COMP) lost 25 points to 2,209, according to early tallies.

On Friday, the major indexes gained more than 1%, after a government report showed fewer jobs were lost in July than economists had expected. U.S. markets were closed Monday for Labor Day.

"We're in September, which is traditionally a softer month for stocks, and so far we've escaped that," said Peter Cardillo, chief market economist for Avalon Partners. "But lingering worries won't diminish until we get more indicators that show the decline in economic activity is leveling off and beginning to turn around again."

Financial stocks sank after the report, with American Express (AXP, Fortune 500) leading the way with nearly 4% losses and Citigroup (C, Fortune 500) and JP Morgan Chase (JPM, Fortune 500) both falling more than 2%. Shares of Bank of America (BAC, Fortune 500) also fell 2%.

President Obama will introduce a new $200 billion tax cut on Wednesday that will allow businesses to write off all new investments in equipment made between now and the end of 2011.

A reading on hiring from employment firm Manpower showed that employers are likely to remain reluctant to boost hiring in the fourth quarter.

Companies: Shares of Oracle (ORCL, Fortune 500) gained 6% after the business software maker said it has hired former Hewlett-Packard (HPQ, Fortune 500) CEO Mark Hurd as its president. Later in the day, HP filed suit to block Hurd from the taking the job.

Meanwhile, Barclays (BCS) shares sank 5.4% after the British bank announced its CEO John Varley will retire March 31. Bob Diamond, the bank's U.S.-born president and investment banking chief, will replace Varley.

World markets: European shares dipped. The CAC 40 in France tumbled 1.1%, the DAX in Germany fell 0.6%, and Britain's FTSE 100 lost 0.6%.

Asian markets ended mixed. Japan's benchmark Nikkei index dropped 0.8%, while the Shanghai Composite edged up 0.1% and the Hang Seng in Hong Kong gained 0.2%.

Currencies and commodities: Gold for December delivery rose $8.20 to settle at $1,259.30 an ounce, after surging to a two-month high of $1,261.60 earlier in the day. Oil futures for October delivery dropped 51 cents to settle at $74.09 a barrel.

Bonds: The reignited eurozone fears also spurred investors to buy U.S. Treasurys, sending prices higher and yields lower. The yield on the 10-year Treasury note fell to 2.61% from 2.71% late Friday.

Stocks drift higher ahead of jobs report

The Dow Jones industrial average (INDU) gained 50 points, or 0.5%. The S&P 500 (SPX) gained 9 points, or 0.9%, and the Nasdaq (COMP) composite rose 23 points, or 1%.

On Wednesday, payroll processing firm ADP said private sector employers cut 10,000 jobs in August -- a drop from the downwardly revised 37,000 jobs they added the month before. Economists had expected the report to show an increase in private sector payrolls.

Friday's report to is expected to show that employers cut a total of 120,000 jobs in August after payrolls fell by 131,000 in July, according to economists surveyed by Briefing.com. The unemployment rate is forecast to rise slightly to 9.6%.

Meanwhile, trading volumes continued to be light Wednesday as many market participants are on vacation this week. On the New York Stock Exchange, just under 1 billion shares traded hands.

IBM (IBM, Fortune 500) and Merck (MRK, Fortune 500) led decliners on the Dow, while Boeing (BA, Fortune 500), 3M (MMM, Fortune 500) and Home Depot (HD, Fortune 500) gained. Of the 30 stocks in the blue-chip average, 24 were higher.

After closing out a dismal August, stocks rallied more than 2% on Wednesday to start September on a strong note. But the market is still down between 1% and 3% year to date.

Retail: A majority of retailers reported surprisingly strong August same-store sales, as consumers responded to back-to-school deals and tax holidays. Same-store sales, an important gauge of a retailer's health, measure sales at stores open at least a year.

Sales tracker Thomson Reuters said 65% of the retailers in its index, that have reported sales so far, have beat expectations.

Shares of major retailers were higher in early trading. JC Penny (JCP, Fortune 500), Macy's (M, Fortune 500) and Nordstrom (JWN, Fortune 500) led the charge.

Economy: Weekly jobless claim figures dipped slightly, by 6,000 claims, to 472,000 in the week ended Aug. 28. Economists expected the number of Americans filing new claims for unemployment insurance to have edged up slightly last week to 475,000.

Pending home sales -- a forward looking gauge -- rose 5.2% in July, according to an index from the National Association of Realtors. But the index, which is based on sales contracts signed in the month, was down over 19% from July 2009. Economists had expected pending home sales would be flat in July.

The housing data helped boost shares of homebuilders Hovnanian (HOV), PulteGroup (PHM) and D.R. Horton. (DHI)

Separately, the government said factory orders rose 0.1% in July, versus a forecasted 0.3% gain. But the Commerce Department said orders fell 0.6% in June, an improvement over the originally reported 1.5% drop.

The Labor Department said labor productivity in the non-farm business sector fell at an annual rate of 1.8% in the second quarter of 2010. The drop came as hours worked increased 3.5%, the largest quarterly gain in over four years, and output rose 1.6%.

The drop in productivity was roughly in line with estimates from private sector economists.

Companies: Shares of Mariner Energy (ME) fell 2.5% after a fire occurred on an oil and gas production platform the company owns in the Gulf of Mexico.

All 13 people onboard the Vermilion 380 have been accounted for, Mariner said. They are currently investigating the causes of the incident. The company said an initial flyover found no indication that oil or gas had leaked as a result of the fire.

Burger King (BKC) said Thursday that it has agreed to be acquired by investment firm 3G Capital in a deal valued at $4 billion. Shares of the fast-food company rose 25% after surging 14% in the previous session on rumors of the deal.

HP (HPQ, Fortune 500) raised its offer to buy data storage company 3PAR to $33 per share, topping a $32 bid from Dell (DELL, Fortune 500). The computer makers have been engaged in a bidding war for 3PAR since Dell made an $18 per share offer on Aug. 16.

World markets: European shares were essentially flat. The CAC 40 in France gained 0.2%, while Britain's FTSE 100 and the DAX in Germany were both little changed.

Asian markets closed higher. Japan's benchmark Nikkei index added 1.5%. The Shanghai Composite rose 1.3%, and the Hang Seng in Hong Kong gained 1.2%.

Currencies and commodities: The dollar slipped against the euro and the Japanese yen, but edged higher versus the British pound.

Oil futures for October delivery rose $1.03 to $74.94 a barrel. Gold for December delivery added $5.30 to $1,253.40 an ounce.

Bonds: The yield on the 10-year Treasury note rose to 2.63% from 2.58% late Wednesday.