Stocks edge higher

NEW YORK (CNNMoney) — U.S. stocks edged higher in early trading Thursday but the gains were tepid as investors remain on edge about Japan’s recovery and spreading unrest in the Middle East.

The Dow Jones industrial average (INDU) gained 25 points, or 0.3%; the S&P 500 index (SPX) was up 1.9 points, or 0.2%; and the Nasdaq Composite (COMP) gained 8 points, or 0.3%.

The biggest gainer in the S&P 500 was Red Hat (RHT), the world’s largest publisher of Linux software, whose shares surged 16% in early trading, The cloud-computing company reported stellar earnings and raised its forecast.

There’s still a lot of nervousness in the market as geopolitical worries remain at the forefront.

“Without being cynical about it, I don’t think the market really expected this week to produce a gold-plated solution to all of these problems,” said Philip Isherwood, equities strategist at Evolution Securities.

Investors “are starting to feel that they can accommodate these problems to an extent,” he added.

European stocks rose in morning trading, shrugging off downbeat reports from Portugal and Spain. Britain’s FTSE 100 added 1%, the DAX in Germany gained 1.5% and France’s CAC 40 rose 0.9%.

Portugal’s Prime Minister, Jose Socrates, resigned early Wednesday after parliament rejected his administration’s latest proposal for austerity measures, reports said. The plan is aimed at avoiding a bailout.

And ratings agency Moody’s downgraded its debt ratings of 30 Spanish banks, saying the outlook remains weak.

U.S. stocks finished higher Wednesday, thanks to a late-day advance, as investors shrugged off jitters about turmoil in the Middle East and Japan’s nuclear issues. The Dow closed 67 points higher, or 0.6%.

Economy: Before the start of trade, the government reported weekly filings for first-time unemployment benefits that were roughly in line with expectations, but stayed below 400,000.

The Commerce Department reported durable goods orders fell 0.9% in February, compared with a 3.6% rise posted in January. Economists were expecting a 1.1% rise in February.

Companies: Electronics retailer Best Buy (BBY, Fortune 500) reported profit and sales that beat forecasts. Shares rose 2%.

Walgreen Co. (WAG, Fortune 500) said early Thursday it will buy online retailer Drugstore.com (DSCM) for $409 million. Shares of Drugstore.com soared more than 110% on the news.

After the bell, software giant Oracle (ORCL, Fortune 500) and smartphone maker Research in Motion (RIMM) will report. Analysts expect RIM to have earned $1.76 a share while Oracle is expected to post a 50-cents-a-share profit.

World markets: Asian markets ended mixed. The Shanghai Composite fell less than 0.1%, the Hang Seng in Hong Kong closed 0.4% higher and Japan’s Nikkei fell 0.2%.

Currencies and commodities: The dollar lost ground versus the euro, but it gained against the Japanese yen and the British pound.

Oil for May delivery gained 10 cents, or 0.1%, to $105.83 a barrel.

Gold futures for April delivery rose $1.40, or 0.1%, to $1,440.20 an ounce. Gold closed at a record high in the previous session, settling at $1,438 an ounce.

Bonds: The price on the benchmark 10-year U.S. Treasury fell, pushing the yield up to 3.39% from 3.26% late Wednesday.  

First Published: March 24, 2011: 9:57 AM ET