Wall Street stocks rose in hesitant trade Thursday as the market digested news of a third straight drop in new US unemployment claims and a mixed set of sales reports from retailers. Sentiment was helped by a merger announced in the tech sector although trading was cautious ahead of a critical report on US payrolls and unemployment for May. The Dow Jones Industrial Average shook off a lackluster opening and gained 74.96 points (0.86 percent) to end at 8,750.24, rebounding from a day of profit taking on Wall Street. The tech-dominated Nasdaq composite advanced 24.10 points (1.32 percent) to 1,850.02 and the broad Standard & Poor's 500 climbed 10.70 points (1.15 percent) to 942.46. Market action came after a report showed new claims for US unemployment benefits fell for the third consecutive week. The Labor Department said that the number of initial claims for jobless benefits in the week ending May 30 dipped to 621,000 from the previous week's revised figure of 625,000. 'If declines are replicated in the weeks ahead, the labor market could be at a turning point,' said Andrew Gledhill at Moody's Economy.com. 'These data are encouraging and suggest that the worst pace of labor market deterioration may be behind us, but there is still a long way to go.' A separate report showed US nonfarm productivity rose at a revised 1.6 percent in the first quarter, another positive sign. 'Despite the recent pain we have encountered it now seems the economy is growing again and these increases in productivity will ultimately elevate the growth potential of the US economy,' said Brian Wesbury at First Trust Portfolios. Scott Marcouiller at Wells Fargo Advisors said the market was cautious ahead of Friday's report on US payrolls and unemployment, seen as one of the best indicators of economic momentum. 'Tomorrow's important employment report will provide some guidance on how much firepower is left in the current rally,' he said. News from the retail sector was less than encouraging, showing sluggish spending in a key economic sector. Among key stocks in retail, Target dipped 0.05 percent to 40.95 dollars after reporting a 6.1 percent drop in same-store sales last month, while Costco fell 1.25 percent to 47.87 dollars after it reported a 7.0 percent sales decline. Wal-Mart, the sector leader, edged lower by 0.02 percent to 50.87 dollars after announcing expansion plans in the US market that would create 22,000 jobs in 2009. Elsewhere, Intel rose 1.19 percent to 16.13 dollars after announcing the acquisition for 884 million dollars of software maker Wind River Systems to expand its offerings into wireless devices. Wind River shares shot up 47 percent to 11.76 dollars. Economically sensitive industrial shares were sharply higher, with aluminum maker Alcoa up 6.16 percent at 10.69 dollars and heavy equipment firm Caterpillar rising 3.71 percent to 38.02 dollars. Rising crude prices helped the oil sector, as ExxonMobil added 1.25 percent to 72.98 dollars and Chevron 2.24 percent to 69.79. Bonds fell sharply amid ongoing concerns about US debt. The yield on the 10-year Treasury bond rose to 3.716 percent from 3.551 percent Wednesday and that on the 30-year bond increased to 4.595 percent against 4.445 percent. Bond yields and prices move in opposite directions. 