Dow closes up after wild swing

Stocks took an afternoon nap Thursday and then rallied in the last hour but did not match the lofty heights of early morning trading although only the Nasdaq was dragged into losses by technology stocks.

The Dow closed up 143.1 points, or 1.3 percent at 11,154. The Standard & Poor's 500 index closed up 9.3 points, or 0.81 percent at 1,160.4.

Technology stocks fell more than the rest of the market, and the Nasdaq composite index closed off 10.8, or .43 percent, to 2,480.7.

Stocks rose sharply in early trading after the government reported that first-time applications for unemployment benefits fell to a five-month low. The government also raised its estimate of economic growth in the April-June period. The Commerce Department said the economy grew at a 1.3 percent annual rate in the second quarter, up from its previous estimate of 1 percent.

Banks, which would have the most to lose if Europe's debt crisis gets worse, rose more than the rest of the market. JPMorgan Chase & Co. rose 0.3 percent, and U.S. Bancorp rose 1 percent.

One analysts said he thinks stock trading was likely to remain volatile until investors get more certainty about Europe's debt crisis and the U.S. economy. "Until we start to see more clarity on policy intervention, we'll continue to see this intraday, manic market reaction," said James Dailey, chief investment officer of TEAM Financial Managers Inc.

Nevertheless, it seemed that big investors are beginning to relax. "I think our markets have fairly well priced in all but the most draconian of scenarios," Wilbur Ross, the billionaire chairman of private-equity firm WL Ross & Co., said Thursday in an interview on Bloomberg Television's "In the Loop" with Betty Liu. "Unless something really calamitous happens," such as a default of a larger European country like Spain or Italy, "short of that I think we've pretty well priced things in."