U.S. Stocks Turn Positive As Market Considers Data

NEW YORK (MarketWatch) -- U.S. stocks on Thursday tentatively turned higher as investors weighed early economic data, weak forecasts from Applied Materials Inc. and retailer J.C. Penney Co., and more trouble in the credit markets.

"Credit woes continue to weigh, along with weak corporate forecasts," said Peter Cardillo, chief market economist at Avalon Partners.

After falling more than 50 points and then crossing briefly into positive territory, the Dow Jones Industrial Average more recently rose 28.6 points to 13,259.6; of the Dow's 30 components, 20 were higher.

The S&P 500 gained 1.69 points to 1,472.27, while the Nasdaq Composite gained 8.33 points to 2,652.65.

In early data, the government reported a 0.3% increase in the consumer price index in October, with a 1.4% gain in energy prices fueling the rise. The core CPI, which excludes food and energy costs, gained 0.2% in October.

Both numbers were as expected.

"While CPI was in line with expectations, if you go through the report, you'll see the year-to-year numbers are not that great," said Cardillo.

In separate data, the Labor Department reported first-time jobless claims last week jumped 20,000 to 339,000, more than had been expected.

On the New York Mercantile Exchange, gold futures fell sharply, dropping $17 to $797.7. .

Crude-oil futures also fell on the NYME, dropping $1.44 to $92.65 a barrel.

Bond prices were also ahead, with the benchmark 10-year note up 4/32 to 100 3/32, its yield slipping to 4.238%. .

Issues in action

In earnings, J.C. Penney posted a 9.1% drop in third-quarter profit and cut its outlook for the fourth quarter as well as the full year.

Applied Materials reported revenue in the current quarter could drop as much as 18% amid weak corporate demand for computer memory chips.

Meanwhile, Barclays became the latest bank to disclose credit-related write-downs, with the bank on Thursday saying it would write off $2.7 billion.

And, a General Electric Asset Management bond fund in GE's pension program is offering external investors redemption of the bond below par after losses in mortgage-backed securities, with the move tied to spreading losses in the subprime mortgage market. .

GE shares fell 0.9%.

By Kate Gibson