NEW YORK - Stocks managed to notch a modest gain Thursday, with Wall Street cautious ahead of Friday's jobs report but hopeful that the global financial system is on the mend.
Federal Reserve Chairman Ben Bernanke told Congress Thursday the Fed expects to recover most, if not all, the $29 billion worth of loans it made to keep struggling Bear Stearns Cos. from collapse. Bernanke's remarks, in which he defended the central bank's decision to aid JPMorgan Chase & Co.'s buy of Bear Stearns, were calming to investors hoping that demand is returning to the tight credit markets.
John Thain, the chief executive of Merrill Lynch & Co., also lent some solace to the market after telling Japanese financial newspaper The Nikkei that the investment bank has sufficient cash and will not need to raise more. The stock market has been performing well recently due to its newfound confidence about global financial system - even in the face of poor economic data. Early Thursday, stocks dipped after the Labor Department reported a spike in jobless claims to a level not seen since September 2005.
But the decline was very mild and short-lived - particularly given the huge advance Wall Street logged Tuesday and has mostly maintained, and the fact that economists expect the government today to report there was a jobs loss in March for the third straight month.
"I think that the desire to sell is coming off," said Thomas Lee, equities analyst at JPMorgan. The fact that the market has not been shaken by recent disappointing economic data "tells me that the recession is largely discounted."
The Dow Jones industrial average rose 20.20, or 0.16 percent, to 12,626.03.