Stocks that outperform in a weak economy helped buoy the Dow and S&P 500 on Thursday as concerns about faltering growth and inflation prompted investors to seek out less volatile names.
Energy shares also rallied as U.S. crude gained more than 1 percent to trade above $108 a barrel.
The S&P 500 fell almost 1 percent early but found support near 1,300, a level that attracted buying interest in early March.
Stocks have lately sagged as economists have lowered forecasts for U.S. growth. A Reuters poll of economists showed 2011 gross domestic product forecasts fell to 2.9 percent from 3.1 percent.
“GDP forecasts are continuing to fall, so (bets on defensives) are a safety trade,” said Peter Boockvar, equity strategist at Miller Tabak & Co.
Adding to the bearish sentiment, Google Inc (GOOG.O) shares fell 5 percent after the bell after the Internet giant posted quarterly results.
The Dow industrials’ top percentage gainers during the regular session were Coca-Cola Co (KO.N), up 1.5 percent, Kraft Foods Inc (KFT.N), up 1.7 percent and Merck & Co (MRK.N), up 1.2 percent.
A Senate investigation of Goldman Sachs hurt the Wall Street giant and some of its peers, while an unexpected rise in jobless claims added to bearish sentiment that kept gains in check.
Goldman shares fell 2.7 percent to $155.79 and were a drag on the S&P financial sector (.GSPF), which was down 0.9 percent.
Further weighing on financials, major housing lenders agreed late on Wednesday to costly fixes of their foreclosure practices as part of a settlement with U.S. bank regulators that jumped ahead of a states’ probe.
The Dow Jones industrial average (.DJI) rose 14.16 points, or 0.12 percent, to 12,285.15. The Standard & Poor’s 500 (.SPX) gained 0.11 of a point, or 0.01 percent, to 1,314.52. The Nasdaq Composite (.IXIC) dropped 1.30 points, or 0.05 percent, to 2,760.22.