Stocks edge higher amid Europe uncertainty

By msnbc.com news services

Stocks were higher Thursday, with investors brushing off a weak read on the labor market as uncertainty ahead of elections in Greece continued to be the overriding factor in equities.

Traders were reluctant to make big bets ahead of the Sunday elections, which could lead to Greece's exit from the euro zone, a prospect that has pressured U.S. equities for the past several weeks and contributed to a steep decline on Wednesday.

The number of Americans filing new claims for unemployment benefits unexpectedly rose last week, the latest economic data pointing to sluggish conditions in the United States.

As much as 800 million euros ($1 billion) has been pulled out of Greek banks daily ahead of the election. Investors fear that if Greece leaves the euro zone, other peripheral nations may also have to exit.

"People are waiting to hear the outcome of the elections in Greece, and I'm expecting heightened volatility until we get some clarity on that," said Wayne Kaufman, chief market analyst at John Thomas Financial in New York.

"And with so little trading volume, it will be easy for the market to get pushed around. That's why each day has been so lopsided lately."

In other U.S. data, consumer prices fell 0.3 percent in May, the biggest drop in over three years.

Exacerbating worries about Europe, Moody's Investor Service cut its rating on Spanish government debt on Wednesday by three notches to Baa3, saying the recently approved euro zone plan to help Spain's banks will add to the country's debt burden.

Italy was also in the spotlight as the country's borrowing costs jumped at a bond auction on Thursday.

Nokia Corp will cut 20 percent of its work force and said its phone unit would post a deeper-than-expected loss in its second quarter because of tough competition.

Reuters contributed to this report.

The Greek election is this weekend, a crucial moment for Europe. What plan of action do European leaders need to take to solve the crisis? In our very own CNBC Summit, Michelle Caruso Cabrera, Steve Liesman, and Simon Hobbs set out to find that answ...

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