NEW YORK — Stocks rallied to finish mixed Thursday after spending most of the day in the red. Investors were reminded that Europe has not solved its debt crisis and the U.S. economy is far from healed.
The Dow Jones industrial average was down 94 points at its low but finished up 19.61 points at 13,145.82. The Standard & Poor’s 500 index lost 2.26 points to close at 1,403.28, and the Nasdaq lost 9.60 points to 3,095.36.
The government released some incremental good news: The number of people seeking unemployment benefits last week dropped to the lowest since April 2008, and economic growth for the last three months of 2011 was in line with expectations.
But the government also said many more people than originally estimated filed unemployment claims in recent months. And economists believe growth has slowed to an annual rate of about 1.5 percent from 3 percent last quarter.
A belief that the economy is improving has driven a strong rally in stocks this year. Now, “investors are pausing to examine whether the growth is real,” said Lawrence Creatura, a Rochester, N.Y., portfolio manager at Federated Investors.
Investors are also waiting to see companies’ earnings for the first three months of the year. The earnings season traditionally kicks off with Alcoa, which reports results April 10.
“We’re in that odd period of silence,” Creatura said. “It’s like a bad Western movie where one guy turns to the other and says, ‘It’s quiet out here,’ and the other says, ‘Yeah, too quiet.’”
David Rolfe, chief investment officer at Wedgewood Partners in St. Louis, said he expects stocks to be volatile during earnings season. The S&P has gained as much in three months than some analysts thought it would all year.
“The stock prices got ahead of expectations,” Rolfe said, “and there’s a price to pay.”
Some of the day’s rally may have been buying ahead of the end of the first quarter, said Kenny Polcari, managing director at ICAP Equities.
“I think there’s a little bit of nervousness creeping in,” said Paul Simon, chief investment officer at Tactical Allocation Group in Birmingham, Mich.
The price of oil fell $2.63 to $102.78 in New York, the first time it has finished under $103 in more than a month, after France’s prime minister said there was a “good chance” the U.S. and Europe would release oil reserves.
Concerns about the high cost of gasoline continue to weigh heavily over the economy, even though Thursday brought some temporary relief. The price of oil fell $2.63 per barrel in New York to $102.78.
Gasoline at the pump rose a penny, to an average $3.92 per gallon. Investors worry that the economic recovery could be threatened as the price of gasoline inches toward $4.11, the record, set in 2008. In Arkansas, the average price of a gallon of gasoline Thursday was $3.76, according to AAA.
Declining stocks led advancers by about 3-to-2. Consolidated volume on the New York Stock Exchange was a lighter-than-average 3.8 billion shares.
Business, Pages 24 on 03/30/2012