Stocks ended slightly higher on Thursday, as merger activity gave the technology sector a lift, offsetting a report about higher labor costs that once again sparked worries about inflation and further interest-rate hikes.
The Dow Jones Industrial Average rose 3.62, or 0.03 percent, to 10,553.49. The Standard & Poor's 500 Index was up 2.07, or 0.2 percent, to 1,204.29. The Nasdaq Composite Index gained 9.94, or 0.5 percent, to 2,097.80.
In the technology sector, Sun Microsystems Inc. said it would buy Storage Technology Corp. for $4.1 billion. The acquisition gives Sun added storage services to offer its customers. And Shopping.com soared after an announcement that it will be purchased by eBay Inc. for about $260 million in cash, or $21 per share.
A Labor Department report said factory orders rose in April at the fastest rate in five months, and investors were encouraged by a 2.9 percent rise in productivity in the first quarter. Retail sales in May were fairly strong despite a chilly spring. But the Labor Department reported a larger-than-expected number of first-time jobless claims filed last week, and the department's productivity data pointed to the possibility of higher wage costs.
Among local movers, shares of Gemstar-TV Guide International Inc. jumped 8.3 percent to $3.54 after the L.A.-based company announced it had signed licensing agreements with Scientific-Atlanta Inc. late Wednesday to settle outstanding litigation and grant each access to the other's interactive program guide patents.
And Hilton Hotels Corp. rose 1.9 percent to $24.87 after the Beverly Hills-based hotelier said it signed a licensing agreement with Starbucks that will enable selected Hilton, Doubletree and Embassy Suites Hotels to operate Starbucks-licensed stores.
On the down side, shares of Big 5 Sporting Goods Corp. dropped 3.2 percent to $25.42 after the El Segundo-based sporting goods retailer said it had delayed a potential delisting for now. Nasdaq granted the company an extension until August 12 to file its annual report for the year ended Jan. 2 and its report for the quarter ended April 3.
And IRIS International Inc. fell 0.2 percent to $18.44 after the Chatsworth-based urinalysis equipment maker's stock was downgraded to "hold" from "buy" by analyst Ernest W. Andberg at Feltl & Company. The price target was set at $16.50 per share.
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