INVESTORS FAVORING SAFE BETS SEND STOCK MARKET UP.

Byline: Eileen Glanton Associated Press 

Stocks managed their strongest gains in more than a week Thursday as investors sought out bargains or safe bets a day before a key government report on unemployment.

The Dow Jones industrial average ended a turbulent session with a gain of 119.05, closing at 10,793.82. The Dow had tumbled 108 points in morning trading before recovering.

Broader stock indicators were mostly higher, but any gains were hard-fought and potentially fragile, analysts said. The Standard & Poor's 500 rose 8.38 to 1,313.71, and the Nasdaq composite index rose 25.83 to 2,565.83.

The Nasdaq, heavily weighted with technology stocks, eked out its first gain since last Wednesday. The index is now 10.5 percent below its July 16 record high of 2,864.48, a level that many analysts believe will lure cautious buyers.

``Some of the selling pressure has been relieved, but you certainly can't call it a rally,'' said Robert Stovall, president of Stovall/Twenty-First Advisers.

Many investors remained off-balance in advance of Friday morning's Labor Department report on unemployment. Federal Reserve Chairman Alan Greenspan told Congress last week any further decline in the low U.S. jobless rate could suggest that inflation is beginning to threaten the U.S. economy.

Greenspan has already signaled the Fed's willingness to raise interest rates in a pre-emptive strike against inflation.

Thursday, however, the markets were able to shrug off two possible harbingers of accelerating inflation. The Labor Department's report on productivity and labor costs showed American workers' productivity slowed significantly in the spring, rising at an annual rate of just 1.3 percent. Labor costs surged at an annual rate of 3.8 percent, the worst showing since the end of 1997.

The uncertain economic news sent some investors heading for conservative consumer stocks that are considered safe under most circumstances. Among the Dow components, Union Carbide rose for a second straight day, gaining $3.5625 to $62.9375, and 3M rose $2.6875 to $94.4375.

IBM shot up $4.6875 to $123.1875 amid reports it will soon unveil a new, faster way to store information.

And American Express picked up $3.625, closing at $127.125 after the company's chief executive detailed the company's Internet strategy to investors and analysts.

Traders said the promise of big online spending by a major financial-services firm lent support to a rally by Internet stocks, most of which have been pummeled in recent sessions.

A recent slump has left many stocks ripe for purchase at their new, lower prices. Yahoo!, which traded at $244 on April 6, sank over the next few months. Thursday, it rebounded $7.375 to $128.375.

Online auctioneer eBay rose $17.125 to $92.875, and retailer drugstore.com gained $10.25 to $44.

But America Online was one of the biggest decliners in the S&P 500, losing $3.50 to $83.9375. AOL is battling competitors over its instant-messaging technology, and Thursday, the Wall Street Journal reported Microsoft is working to develop an inexpensive or free dial-up Internet service.