Blue chip shares overcame several slips into negative territory to manage a modest gain, extending this week's rally by the Dow Jones industrial average to more than 350 points.

Investors drew little guidance from a pair of economic reports, while oil prices were relatively steady after a sharp drop on Wednesday that helped drive stocks higher.

The Labor Department reported that the number of new people signing up for jobless benefits dropped sharply last week compared with a week earlier. However, the Conference Board reported that its Index of Leading Economic Indicators fell in April, the fourth consecutive decline in that gauge of future economic activity.

The strength in the labor market has helped drive the Federal Reserve's policy of gradually raising interest rates to prevent an inflationary spurt in the economy's growth. Yesterday's stock rally was fueled by a report showing mild inflation in April.

"We've seen a lot of mixed data, as is usually the case with fast growth going to slow and the Fed raising interest rates," said Scott Wren, equity strategist for A.G. Edwards & Sons. "As the market becomes more comfortable with that, we think they're going to be buying stocks."

The Dow rose 28.74 to 10,493.19 — up 0.27 percent for the day and nearly 3.5 percent for the week — after wavering in a narrow range through the day.

The Standard & Poor's 500 index rose 5.52, or 0.47 percent, to 1,191.08. The Nasdaq composite index rose 11.93, or 0.59 percent, to 2,042.58. The Russell 2000 index of smaller companies rose 2.58, or 0.42 percent, to 610.46.

Mike Viracola, co-head of equities at Adams Harkness in Boston, said today's sluggish turn also may have been a reflection that earnings reporting season is winding down.

In addition, there was no new drama in the energy markets to play on investor concerns about soaring fuel prices. Oil futures slipped below $47 a barrel, settling at a new three-month low, after a sharp decline yesterday driven by a report showing more strong growth in U.S. crude supplies.

Many analysts predict crude will continue falling in the long-term — prices have dropped more than $10 since their all-time peak of $58.28 on April 4 — but investors remain leery.

The Dow's biggest gainers were Exxon Mobil Corp. and General Motors Corp. Exxon Mobil rose $1.18, or 2.2 percent, to $54.83, while GM advanced $1.14, or 3.6 percent, to $32.75. After the close, GM announced that its board has decided the company is "neutral" with respect to Tracinda Corp.'s offer to purchase up to 28 million GM shares at $31 apiece. While the Tracinda offer has boosted GM's share price, the stock has been hurt by Standard & Poor's downgrade of the company's credit rating to "junk" status.

DuPont Co. was among the Dow's biggest decliners — falling 43 cents, or 0.9 percent, to $47.61 — after the company said it received a Justice Department subpoena for documents regarding perfluorooctanoic acid, a chemical used to make its nonstick Teflon product. The EPA has said PFOA could pose health risks.

Advancing issues outnumbered decliners by more than a 3-to-2 ratio on the New York Stock Exchange, but by a narrower margin on the Nasdaq Stock Market.

NYSE volume totaled just 1.37 billion shares at 4 p.m., down sharply from 1.78 billion at the same point yesterday.

Netflix Inc. closed just 63 cents, or 4.1 percent, higher at $16.13, despite jumping as much as 24 percent on news the online DVD rental company has reached a deal to run that Wal-Mart Stores Inc.'s competing service.

AnnTaylor Stores Corp. rose 62 cents, or 2.5 percent, to $25.95 after the women's apparel retailer reported its first-quarter profit fell by nearly half, but posted better-than-expected sales for its first quarter.

Payless ShoeSource Inc. rose $2.15, or 15.2 percent, to $16.28 after the discount footwear retailer said its first-quarter profit more than doubled, soundly beating Wall Street estimates.

Overseas, Japan's Nikkei stock average rose 2.2 percent and Germany's DAX index rose 0.8 percent, while Britain's FTSE 100 and France's CAC-40 both rose 0.3 percent.