Seesaw session for stocks

Stocks finished moderately higher in fitful trading Thursday as some investors found stocks to buy after the market was pummeled by three straight days of losses.

With the market having largely priced in the possibility of a recession, many believe there are plenty of valuable stocks at cheap prices.

Before Thursday, the Dow Jones industrial average had fallen this week by 543 points, or 4.3%, giving up all of last week’s sharp gains.

Though the market ended up rising Thursday, trading was extremely fickle because of a batch of gloomy data that included declining January sales at major retailers, a drop in December sales of pending homes and a disappointing outlook from networking supplier Cisco Systems. The major indexes seesawed throughout the day.

The Dow rose 46.90 points, or 0.4%, to 12,247.00 after trading down about 80 points and up about 130. The index remains nearly 14% below its record close of 14,164.53 recorded last October.

Broader stock indicators also recovered some ground. The Standard & Poor’s 500 index rose 10.46 points, or 0.8%, to 1,336.91.

The technology-heavy Nasdaq composite index rose 14.28 points, or 0.6%, to 2,293.03. Wednesday, the Nasdaq had fallen into bear market territory, down 20.2% from its 2007 high.

The Russell 2,000 index of smaller companies jumped 10.29 points, or 1.5%, to 702.78.

Advancing issues outnumbered declining shares by nearly 2 to 1 on the New York Stock Exchange.

Government bond yields surged as a Treasury auction of 30-year bonds attracted disappointing demand. The yield on the benchmark 10-year Treasury note jumped to 3.76% from 3.6% late Wednesday.

Oil futures rose 97 cents to settle at $88.11 a barrel on the New York Mercantile Exchange. Gold prices also climbed.

Investors may have been encouraged to buy back into stocks due to a rise in the dollar, whose decline over the last several months has contributed to worries about inflation and a possible drop in foreign interest in U.S. investments.

Peter Cardillo, chief market economist at Avalon Partners, said the dollar’s advance came after European Central Bank chief Jean-Claude Trichet said the United States and Europe remained economically intertwined.

The comment suggested to investors that strength in other countries could help stabilize the U.S. during its rough patch.

Fears of a global economic slowdown have been weighing on stocks around the world.

As expected Thursday, the Bank of England lowered its key interest rate by a quarter-point, its second cut in three months, while the European Central Bank left its key rate unchanged at 4%.

Another argument for bargain hunting Thursday was that the recent spate of negative economic data raised the odds of further interest-rate cuts by the Federal Reserve.

The market’s indecisive movements during the day, however, show it has not moved past the many worries swirling about personal spending, the crumpling housing market and deteriorating conditions in consumer credit.

Late Wednesday, Cisco predicted sales in the current quarter would grow 10%, well below the 15% that Wall Street projected. But Cisco finished up 30 cents at $23.38, an apparent beneficiary of bargain hunting, after trading down as much as 5.7%.

Meanwhile, retail stocks -- also regarded by some investors as cheap right now -- rose even after the major chains logged their worst January in about 40 years.

Wal-Mart Stores reported a 0.5% rise in January same-store sales, or sales at stores open for at least a year, while Target, Gap, Limited Brands and Ann Taylor Stores each said their sales fell.

An index of 31 retailers in the S&P; 500 jumped 3.7%.

Target added $3.10, or 6.1%, to $54.10; Kohl’s climbed $2.93, or 6.8%, to $45.85; and Wal-Mart gained $1.01 to $49.84.

J.C. Penney jumped $3.72, or 8.5%, to $47.44 after posting a smaller-than-expected decrease in January sales and raising its earnings estimate for the fourth quarter.

In other market highlights:

* JPMorgan Chase gained $1.39 to $45.11. CEO Jamie Dimon said bond insurers were unlikely to default. He also said a rating downgrade of a bond insurer would not “be that big a deal for the industry or JPMorgan.” An index of financial stocks in the S&P; 500 gained 1.7%.

* Overseas, key stock indexes fell 2.6% in Britain, 1.7% in Germany and 1.9% in France. Shares in Japan climbed 0.8%. Many other Asian markets were closed for a holiday.