By Ryan Vlastelica
NEW YORK (Reuters) - U.S. stocks rose in a volatile session on Thursday, with investors brushing off a weak read on the labor market as uncertainty ahead of elections in Greece continued to be the overriding factor in equities.
Quick market swings were expected to persist ahead of the Sunday elections, which could lead to Greece's exit from the euro zone, a prospect that has pressured U.S. equities for the past several weeks and contributed to a steep decline on Wednesday.
The number of Americans filing new claims for unemployment benefits unexpectedly rose last week, the latest economic data pointing to sluggish conditions in the United States.
Despite that, Wall Street continued taking its cue from the news flow out of Europe, which has caused volatility to spike. Major indexes have swung wildly throughout each day this week, with the CBOE Volatility index <.VIX> up almost 16 percent.
"Until we get some clarity on the Greek issue, we'll continue seeing this volatility, with no clear trend one way or the other," said Bruce McCain, chief investment strategist at Key Private Bank in Cleveland, Ohio.
As much as 800 million euros ($1 billion) has been pulled out of Greek banks daily ahead of the election. Investors fear that if Greece leaves the euro zone, other peripheral nations may also have to exit.
In other U.S. data, consumer prices fell 0.3 percent in May, the biggest drop in over three years.
The Dow Jones industrial average <.DJI> was up 77.42 points, or 0.62 percent, at 12,573.80. The Standard & Poor's 500 Index <.SPX> was up 7.11 points, or 0.54 percent, at 1,321.99. The Nasdaq Composite Index <.IXIC> was up 8.29 points, or 0.29 percent, at 2,826.90.
Exacerbating worries about Europe, Moody's Investor Service cut its rating on Spanish government debt on Wednesday by three notches to Baa3, saying the recently approved euro zone plan to help Spain's banks will add to the country's debt burden.
Italy was also in the spotlight as the country's borrowing costs jumped at a bond auction on Thursday.
The S&P is down 0.7 percent so far this week, a relatively mild decline, as sharp drops have been partially offset by some equally strong rallies. So far in the second quarter, however, the index is down 6.5 percent.
"The decline may have gone far enough that prices may at least avoid slipping further," McCain said, "but there is still a lot of uncertainty out there."
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(Editing by Dave Zimmerman)
