Stocks mixed in early trade, following huge rally

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NEW YORK (AP) — Stocks were little changed in early trading Thursday, a day after the market had its best day in two and a half years.

Another rise in applications for weekly unemployment benefits set a negative tone for the markets. The Labor Department said initial applications rose to 402,000 last week. The increase means that layoffs are rising slightly.

The government’s monthly labor report comes out Friday. Economists forecast that the unemployment rate will remain at 9 percent.

On the positive side, the Institute for Supply Management reported that manufacturing grew last month at the fastest pace in June.

Neither report did much to move stock indexes. Markets had surged the day before after a coordinated move by central banks to stave off a freeze-up in global lending. The Dow soared 490 Wednesday, its biggest gain since March 2009, after central banks around the world slashed borrowing costs to shore up European banks and avert a deeper credit crisis.

Forty-five minutes after the opening bell, the Dow Jones industrial average was up less than a point at 12,046. The index was moving between small gains and losses in early trade.

The Standard & Poor’s 500 index edged up 2 points to 1,249. The Nasdaq composite rose 10, or 0.4 percent, to 2,631.

The euro moved higher against the dollar as investors became less fearful about Europe’s financial problems. Borrowing rates for France and Spain eased after both countries had successful auctions of new debt.

Macy’s Inc., Costco Wholesale Corp., Limited Brands Inc. and other retailers reported sales gains Thursday that surpassed Wall Street estimates. Costco and Macy’s gained 1 percent in early trading. Limited rose 1.4 percent.

Barnes & Noble dropped 10 percent after the bookseller posted a third-quarter loss instead of the slight profit analysts had expected. Sales also fell below analysts’ estimates.

Finisar Corp. lost 7 percent after the maker of fiber-optics components reported revenue that was lower than analysts were expecting.