NEW YORK — The stock market’s rally is shifting to a lower gear.
The Dow Jones industrial average tacked on a modest 32 points Thursday after being up as much as 139, and the Standard & Poor’s 500 index edged up to reach its highest level since November.
Investors welcomed a drop in new jobless claims, growth in retail sales and better- than-expected demand at a government debt auction.
But traders also seemed mindful of how far the market has come in its three-month rally.
The stock market has at times run low on fresh evidence of economic recovery that could push the rally further. The data out Thursday helped but weren’t enough to keep the pace of buying strong through the end of trading.
The Labor Department reported that the number of newly laid-off Americans filing for jobless benefits fell last week by 24,000 to 601,000, better than economists’ forecast.
However, the number of unemployed continuing to file for claims rose to 6.8 million, the highest on records dating to 1967.
Meanwhile, the Commerce Department said retail sales rose 0.5 percent in May, interrupting two months of decreases and marking the largest gain since January.
Investors watch those numbers because consumer spending accounts for more than two-thirds of U.S. economic activity.
Doug Lockwood, chief investment officer at Cornerstone Wealth Management, said the improvement in sales is a strong signal that the recession may be easing.
“There has been a lot of rallying and rebounding going on, but we have to continue to see improvements,” Lockwood said.
The Dow rose 31.90, or 0.4 percent, to 8,770.92. The S&P 500 rose 5.74, or 0.6 percent, to 944.89, just above its close June 2 and its highest point since Nov. 5. The Nasdaq composite rose 9.29, or 0.5 percent, to 1,862.37, its best level since Oct. 6.
Investors have been uneasy in the past two months about demand for government debt.
If Washington has to raise rates to attract buyers, that could hurt the economy by boosting borrowing costs.
The market’s losses Wed nesday came after the government had to entice investors with a higher yield for 10-year notes than traders had anticipated.
The yield on the 10-year note is closely linked to interest rates on home mortgages and other kinds of loans. The yield on the three-month T-bill was flat at 0.17 percent.
