Blue-chip stocks staged a late rally Thursday to end within striking distance of their record highs as Wall Street braced for today's jobless data for February.
The Dow Jones industrial average rose 11.92 points to 5,641.69, standing just below Tuesday's record high close of 5,642.42. Standard & Poor's composite index of 500 stocks rose 1.65 points to 653.65.
In the broader market, advancing issues led decliners 1,153 to 1,140 on active trading of 425 million shares on the New York Stock Exchange.
"We had some last-minute buying in blue chips, but overall the market was pretty featureless all day," said Marty Kearney, a trader at PTI Securities. "People are waiting for the February jobs report."
The bond market also lacked direction, as the yield on the benchmark 30-year Treasury bond held at Wednesday's close of 6.46%
The nonfarm payrolls report due today is expected to bolster the case for another cut in interest rates by the central bank. The Federal Open Market Committee--the group that sets interest rates--meets March 26 to consider monetary policy.
Economists polled by Reuters forecast on average a 326,000 increase in nonfarm payrolls for February, a rebound from the steep 201,000 decline in January attributed to severe winter weather in parts of the country.
The unemployment rate is expected to fall to 5.7% from 5.8% in January.
Economists said, barring any major revisions to January data, 300,000 additional jobs in February would average out to an increase of only 50,000 a month, reflecting weak jobs growth.
All of the economic data is important to anticipating whether the Federal Reserve Board will lower interest rates later this month, extending a series of three cuts since July.
Alfred Goldman, A.G. Edwards' technical research director, said the market's correction is starting to wind down.
"We were backing and filling for two weeks working off the 600-point climb. We're doing it in a gentle and benign fashion," he said.
U.S. drug shares rose on speculation of further consolidation in the industry after Swiss drug giants Ciba-Geigy and Sandoz agreed to merge. Schering-Plough was up 2 1/4 to 61 5/8 and Warner-Lambert added 1 1/2 to 106. The two companies are seen as the most likely merger candidates.
Merck was up 3/4 to 67, Pfizer was unchanged at 67 1/2 and American Home rose two to 104 1/2. Glaxo Wellcome, which remains the world's largest drug firm, slipped 5/8 to 26 1/8.
Among market highlights:
* The shares of pulp and paper companies rose sharply after PaineWebber said demand for certain grades of paper, especially uncoated freshsheet, was picking up again after a long slump. International Paper rose 1 3/8 to 38 1/8.
* In a "buy-the-rumor, sell-the-news" strategy, retailing stocks, which had risen in anticipation of good February sales figures, responded to the solid reports Thursday by falling.
Sears Roebuck, Wal-Mart Stores and Dillard Department Stores had same-store sales that matched or beat estimates. Sears was off 1/8 to 47 3/4, Wal-Mart slipped 3/8 to 22 3/4 and Dillard fell 1 3/8 to 33 5/8.
James Meyer, a market analyst at Janney Montgomery Scott in Philadelphia, said an extra leap-year shopping day in February could have artificially added as much as 4% to February sales figures.
* Acme Cleveland jumped 11 to 31. Danaher offered to buy the company for $27 a share. Danaher was unchanged at 34 5/8.
* Manor Care rose 3 1/8 to 42 1/8 on news it plans to spin off its lodging division.
Persistent dryness in the Great Plains, which has stressed the winter wheat crop, lifted prices Thursday, with traders eyeing forecasts for warmer weather that could bring the crop out of dormancy.
Wheat prices have been buoyed by extremely low stocks and the rapid pace of exports. A large new crop is needed to replenish supplies, but the winter wheat crop has suffered through exceedingly dry, harsh conditions in the last several months.
"When the winter wheat comes out of dormancy, crop moisture demands increase and that is when the lack of moisture across the Plains will begin to take its toll," said Smith Barney meteorologist Jon Davis.
March wheat jumped 10 cents to $5.13 a bushel at the Chicago Board of Trade.