The Nasdaq Composite led the stock market to a modest rebound on Thursday as Wall Street celebrated a near-$5 decline in crude oil prices and traders largely shrugged off bearish economic data. 

Today's Market

The Dow Jones Industrial Average rose 34.03 points, or 0.28% to 12063.09, the Standard & Poor’s 500 index gained 5.02 points, or 0.38%, to 1342.83 and the Nasdaq Composite Index picked up 32.36 points, or 1.33%, to 2462.07. The consumer-friendly FOX 50 rose 0.26 points, or 0.03% to 937.37.

Thursday's mini-rally brought the market to a rebound from what had been three straight losing days on the Dow, including a loss of 250 points over the prior two days alone. 

For the second consecutive day the Dow dipped below the psychologically-important 12,000 mark only to bounce higher. The action highlights how much value the market has lost over the past month as the Dow had flirted with 13,000 as recently as May 19. 

Insurer AIG (AIG) led the Dow to a positive finish on Thursday, jumping almost 5% on an analyst upgrade to "Buy" from "Hold" by Citi Investment Research. Also, Boeing (BA) rose 3% a day after it won an appeal over a $35 billion fuel tanker contract with the U.S. Air Force. On the downside, energy titans ExxonMobil (XOM) and Chevron (CVX) pulled back as oil futures declined sharply.

The Nasdaq Composite posted sharper gains than the rest of the market, rising more than 1%. United Airlines (UAUA) led the Nasdaq 100, soaring 20% on the lower oil prices and news it is partnering with Continental (CAL) in a business alliance. Conversely, XM Satellite Radio (XMSR) and Sirius (SIRI) plunged double-digits after Goldman Sachs cut the stocks' price targets. 

The market had been searching for direction for much of the day until crude oil prices closed nearly $5 in the red on news that China hiked fuel prices for the first time since November. Crude closed down $4.75 at $131.93 a barrel in New York. 

Also among the bearish factors on oil, a day ago the government reported U.S. gasoline demand declined last week amid sticker shock with $4 per gallon prices. The energy market didn't react much to earlier reports of supply disruptions in Nigeria. 

Wall Street mostly shrugged off a series of gloomy economic reports, including worse-than-expected jobless claims, a declining manufacturing sector and slow growth in the leading economic indicators index.  

The government reported worse-than-expected initial jobless claims data, showing claims fell by 5,000 last week. Economists surveyed by Dow Jones had been expecting claims to fall by 9,000. Continuing claims, for people who have remained on unemployment benefits for more than a month, fell by 76,000 but remained over the three million level for the eighth straight week. 

The job market has shown weakness in recent months but has not deteriorated to the level that would indicate a definite recession. Still, jobless claims have risen significantly from just a year ago. In May the government said the unemployment rate rose by 0.5% -- the sharpest one-month increase in 22 years. 

Corporate Movers

United Airlines (UAUA) and Continental (CAL) are teaming up in an alliance that will link their networks and services in an effort to save money. As a part of the deal, Continental will join United in the Star Alliance, which already includes U.S. Airways (LCC), Air Canada and others. Continental, which last month ended talks to formally merge with United, will seek approval to join the antitrust immunized alliance. 

Wachovia (WB) is hunting for a new CEO and has hired Goldman Sachs (GS) to advise it in its search, The Wall Street Journal reported on Thursday. The bank, which has suffered big losses due to the credit crisis, won’t likely sell itself but may scale back its ambitions and leave investment banking, the newspaper reported.

Citigroup (C) warned that if current trends continue, the bank may be forced to make substantial additional writedowns related to mortgage investments that went sour. Citi's stock tumbled 4% on the news before recovering.

Coventry Health Care (CVH) lost nearly a quarter of its value after slashing its profit outlook and suffering from analyst downgrades. The insurer now sees 2008 earnings in the range of $3.65 to $3.75 per share. Wall Street had been expecting a much larger profit of $4.43 per share. The news triggered multiple analyst downgrades, including one from Wachovia to “market perform” from “outperform.”

Huntsman (HUN) plunged almost 40% as its $6.5 billion deal to be bought Hexion Specialty Chemicals appeared to be near collapse. Hexion filed suit in Delaware over the deal, saying Huntsman’s debt and lower than expected earnings will make financing for the merger unattainable.

Aetna (AET) slumped even after the health insurer backed its second-quarter and full-year profit outlook. The company still sees an adjusted-profit of 93 cents per share in the current period and $4 in 2008. That forecast is roughly in line with mean analyst estimates from Thomson Reuters for 94 cents and $4.01.

UBS (UBS) was downgraded to “neutral” from “outperform” by Credit Suisse on Thursday, citing the “challenge of rebuilding the franchise.” Shares of the Swiss bank have plunged nearly 50% year-to-date.

XM Satellite Radio (XMSR) and Sirius (SIRI) tumbled to 2003 and 2004 lows respectively after Goldman Sachs slashed its price targets on both stocks and maintained “sell” ratings. Citing large losses and declining cash flows, Goldman said the companies’ stocks are overpriced. The pair of satellite radio companies are waiting to receive a green light from regulators for their proposed merger.

Circuit City (CC) suffered an 11% decline in first-quarter sales, posted a $164.8 million loss and predicted more losses to come. The electronics retailer lost $1 per share, compared to a loss of 33 cents a year ago. Analysts polled by Thomson Reuters had been expecting a larger loss of $1.06 per share. Circuit City also suspended its dividend payments to conserve capital. 

J.M. Smucker (SJM) posted a 13% decline in its fourth-quarter earnings, missing the Street's expectations. The food company said its adjusted-earnings fell to 73 cents per share, five cents shy of analyst estimates. The company's gross profit margin decreased to 30.9% versus 36.5% from a year ago. 

Biogen (BIIB) won its proxy battle with billionaire activist investor Carl Icahn. The biotech company confirmed initial reports that its nominees to the board of directors defeated an Icahn-appointed slate. Icahn had been trying to persuade Biogen to a large pharmaceutical company. 

Carnival (CCL) hit 52-week highs after it beat the Street with its second-quarter results but lowered its 2008 outlook below the Street's view, citing "skyrocketing fuel prices." The cruise line earned 49 cents per share on a 16% rise in revenue to $3.38 billion. Analysts polled by Thomson Reuters had been forecasting 42 cents per share on $3.32 billion in revenue. 

Data Dump

The Philadelphia Federal Reserve's manufacturing index gave the market little good news, declining to -17.1 in June. Economists surveyed by Dow Jones had been expecting the index to rise to -11. This marks the seventh straight negative month for the index -- the longest such streak since 2001. 

The Conference Board's index of leading indicator inched higher in May. The 0.1% increase was in line with expectations and showed slow but still positive growth in the economy.  

World Markets

The Dow Jones Euro Stoxx 50 Index, a gauge of the 50 biggest companies in Europe, fell 21.26 points, or 0.61%, to 3486.71. The FTSE 100, London's benchmark index, lost 48.50 points, or 0.84%, to 5708.40.

On the continent, Paris's CAC 40 Index declined 27.36, or 0.59%, to 4591.39 while Germany's DAX fell 7.74 points, or 0.12%, to 6721.17.

In Asia, Japan's benchmark Nikkei 225 Index fell 322.65 points, or 2.23%, to 14130.17. Hong Kong's Hang Seng Index declined 528.19 points, 2.26%, 22.797.16.