The stock market was almost flat Thursday, yet the Standard & Poor's 500 managed its longest rally since March as data showing an unexpected decline in jobless claims tempered concern about a worsening of Europe's economy.
The S&P 500 added 0.58 points, or less than 0.1%, to 1402.80 after rallying 2.7% the previous four sessions.
"We acknowledge the positive news," said Wayne Lin, a money manager at Legg Mason. "We've had some positive surprises on the jobs front and it seems that housing has found some footing. Yet people are aware of the risks. The risk in Europe is still out there."
Labor Department data showing fewer firings signaled employers are seeing enough demand to retain staff, indicating the economy is sustaining the recovery. Stocks erased earlier gains after The Wall Street Journal reported that former European Central Bank official Otmar Issing said it was wrong to expect the ECB to buy government bonds to ease the region's debt crisis. Economists surveyed by the ECB predicted the region's contraction this year will be worse than forecast.
A five-day rally has taken the S&P 500 up almost 10% from a five-month low on June 1. About 72% of S&P 500 companies that have reported second-quarter results have beaten analysts' earnings estimates, according to data compiled by Bloomberg.
"It's kind of blah," said Malcolm Polley, chief investment officer at Stewart Capital. "Growth is slowing in other parts of the world. It will take time. In addition, we've had a strong move up in stocks. It may be people just getting tired."
Highlights: All 11 stocks in a measure of home builders in S&P indexes gained after data from the National Association of Realtors showed that values nationally jumped the most since 2006 as real estate markets stabilized.
PulteGroup, the largest U.S. home builder by revenue, rose 58 cents to $12.67 after being raised to "overweight" at JPMorgan. KB Home added 64 cents to $10.74, while Beazer Homes rose 12 cents to $2.79 after the two companies were also raised by JPMorgan.
MBIA added $1.30, or 15%, to $10.06. The bond insurer seeking reimbursement from Bank of America over faulty mortgages surged after pledging to carry on a court fight to force the lender to repurchase the loans.
James River Coal gained 29 cents, or 13%, to $2.52. The producer of fuel in Appalachia and the Midwest reported a smaller loss than analysts predicted as costs fell.
