Stocks up modestly after early gains

NEW YORK (AP) — Stocks finished with modest gains in Thursday trading after pulling back from a rally that pushed share prices near their highest levels of the year.

In early trading the Dow Jones industrial average had been up as much as 105 points after index components Caterpillar Inc., Travelers Cos. and McDonald’s Corp. all beat earnings expectations and AT&T Inc. matched forecasts.

The Labor Department said first-time claims for unemployment benefits fell last week. But the decline was essentially offset by a surprisingly sharp upward revision to the previous week’s claims. First-time claims remain stuck at levels that indicate companies are not hiring many workers.

“It was a mixed day for earnings reports and economic data, and the stock market is reflecting that,” said Brad Sorensen, a director of sector research at Charles Schwab.

Once again Bank of America Corp. hurt the Dow as it continues to be dogged by worries about whether investors will force the bank to buy back mortgages it originated.

Caterpillar hit a high for the year. United Parcel Service Inc.’s profit jumped. JetBlue Airways Corp. also reported strong earnings.

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