The Dow rose about 45 points, and LinkedIn traded at more than $100 early in the afternoon but fell before closing
Mark Lennihan / AP
The Dow Jones Industrial Average rose 45.14 points, or 0.4 percent, to close at 12,605.32.
Intel led the blue-chip average lower after news that Goldman Sachs downgraded the chip maker to "sell" from "neutral," citing slowing shipments on processors, rising competition and increasing capital expenditures.
The brokerage also cut its overall view of the semiconductor sector to "cautious" and downgraded Applied Materials to "neutral" from "buy." Hewlett-Packard fell for a third day in the wake of a weak earnings outlook earlier this week. Citigroup also cut HP's price target to $45 a share from $65.
The S&P 500 rose 2.92 points, or 0.2 percent, to close at 1,343.60, while the tech-heavy Nasdaq rose 8.31 points, or 0.3 percent, to close at 2,823.31. The CBOE Volatility Index, widely considered the best gauge of fear in the market, fell below 16.
Among key S&P 500 sectors, industrials and telecom fell, while health care rose.
The main reason the markets rose on Thursday in the face of Goldman's downgrade of Intel, and a host of weak economic news, was the success of the LinkedIn offering, said Todd Schoenberger, managing director at LandColt Trading.
"The markets would have crumbled today if not for the IPO," Schoenberger said.
In Schoenberger's view, the IPO doesn't represent a frothy market top like the Internet bubble of the late 1990s. Instead, he notes, "40 percent of the company's revenues come from the services they sell to recruiters and their tools are very unique."
Stocks had weakened earlier in the session as investors digested a slew of economic news, much of it pointing to further signs of sluggishness in the economy.
One of the more optimistic reports was that initial jobless claims fell last week, although the four-week moving average of claims reached a six-month high.
Still, for individuals who remain unemployed, "there is no recovery without a job," Penrod says. "Until individuals are back, the overall feeling is going to be one of we're not there yet."
That was evident in Conference Board's index of leading indicators, which fell for the first time since June 2010. "While there weren't big moves expected, small positive moves is what we were hoping for," Penrod said. "Unfortunately there is still more uncertainty than people thought there would be."
Another factor in Thursday's markets is tomorrow's expiration day for stock index and equity options, which can lead to volatility as investors roll over contracts.
History has shown that the market often rises going into the day of expirations, said J.J. Kinahan, chief derivatives strategist at TD Ameritrade. "If you're long you are usually better off," Kinahan said.
Perhaps the biggest boost to the market on Thursday was the soaring performance of LinkedIn, which began trading at $83 a share Thursday morning, nearly double its pricing level of $45 a share. The social networking site for professionals, trading under the symbol LNKD, traded at around $108 a share in the early afternoon. At that price, LinkedIn's market cap would be $10.2 billion, bigger than the market caps of some of the market's most well known names, including AMD, Southwest Airlines and NYSE Euronext. The price fell back later in the session, although the shares still rose more than 100 percent.