Wall Street: Thursday close

BLUE Chip investors appeared to be on cruise control ahead of a key jobless report which should show whether the US economy continued to gain altitude last month.

The Dow Jones Industrial Average rose 32.24 points or 0.32% to 10,091.87 to add to a two-day, 240-point rally. The Nasdaq Index did not fare as well, dropping 32.65 points or 1.95% to 1,644.87 as investors turned sour on big name techs.

Economists are looking to the April unemployment report due out before the opening of trading on Friday for signs that the economy continued its climb out of the mild recession officially pegged as starting in March 2001.

New figures on initial jobless claims showed that 10,000 more people went on the dole in the latest week for which information is available. Maury Harris, chief US economist at UBS Warburg, said that the figure gave little cause for optimism. 'The bottom line is that the job market shows no sign of improvement,' he said.

March factory orders did come in stronger than expected, up 0.4% and that helped investor sentiment. Consumer-related shares, which led a strong afternoon rally on Wednesday, continued to do well.

Procter & Gamble gained $1.41 or 1.5% to $93.21, bleach and soap maker Clorox climbed $1.77 or 4% to $46.35 and 3M added $1.16 or 1% to $127.16. DuPont firmed 93 cents or 2% to $45.56 and Alcoa tacked on 42 cents or 1.2% to $34.42.

Financials found support after Salomon Smith Barney recommended Lehman and Merrill Lynch. Lehman shares rose $1.91 or 3.2% to $61.91 and Merrill Lynch was marked up 79 cents or 1.9% to $42.89. Citigroup was ahead 87 cents or 2% to $44.65.

US shares in Irish packaging products company Jefferson Smurfit surged $3.73 or 15.4% to $28.02 after it said it had received a bid approach from an unnamed party. International Paper, among names mentioned as possible bidders, rose 66 cents or 1.6% to $42.26 in a strong forest products sector.

Copier giant Xerox plunged $1.07 or 12% to $8 as its bonds were cut to 'junk' status by Moody's on concerns for its outlook.

Online retailer Priceline.com tumbled $1.16 or 22% to $4.09 after its quarterly sales drop surprised investors. Sun Microsystems, which tumbled 15% on Wednesday as it announced the departure of its chief operating officer, fell another 52 cents or 7.5% to $6.45.

Satellite TV provider EchoStar, which is trying to win regulatory approval to buy rival DirecTV, shed $1.35 or 4.9% to $26.26 after its quarterly numbers came in short of expectations. Conglomerate Tyco International continued its recovery, rising $1.06 or 5.3% to $21.10.

The tech sector slumped, despite a strong report on chip sales from the Semiconductor Industry Association. The SIA said sales leapt 7.2% in March, the strongest increase since 1986. 'The growth rate indicates that inventory build-up has been worked through and that product demand is now beginning to pick up,' the SIA added.

But Intel, the leader in semiconductors, saw its shares sag 76 cents or 2.7% to $27.87. Microsoft lost $1.54 or 2.9% to $51.21. Arch rival Oracle plunged 90 cents or 9.5% to $8.55, its lowest level since mid-1999.