A late surge leaves the major stock averages up just shy of 1%. Stocks managed to cling to modest gains throughout light-volume trading, halting four sessions of declines. Consolidation continues and volume remains modest ahead of Friday morning's August jobs report and the long holiday weekend.

Stocks remained firmer, but gained little traction from the day's economic news.

The number of people applying for state unemployment benefits fell by 4,000 to 570,000 last week, the U.S. Labor Department reported this morning. Economists had predicted a drop to 560,000. Initial claims have been in a fairly narrow range for the past seven weeks. The number of people collecting benefits of any kind remained above 9.5 million.

Separately, the Institute for Supply Management said its service index came in at 48.4 in August, up from 46.4 in July and above economists' forecast for 48, according to by Thomson Reuters. However, a figure below 50 indicates the service sector is still shrinking.

Mixed results from retailers reporting August same-store sales kept buyers at bay. The back-to-school season was disappointing for most. Consumers continue to stay on the sidelines. Clothing stores for kids and teens, from Hot Topic (HOTT) to Wet Seal (WTSLA) posted bigger-than-expected sales declines. Abercrombie & Fitch (ANF) fell on a 29% decline in August same-store sales.

However, Aeropostale (ARO) reported a 9% rise in August same-store sales and raised its Q3 EPS outlook. American Eagle Outfitters (AEO) says its August same-store sales fell 7% but maintained its Q3 EPS outlook. Shares of both of those companies were firmer. Gap (GPS) and Costco Wholesale (COST) posted results that topped investors' expectations.

Sun Micro (JAVA) was lower and a volume leader after European Union antitrust regulators launched an in-depth probe today into Oracle's (ORCL) $7 billion takeover of JAVA on concerns the deal could hurt competition in the database market, Reuters and other news outlets are reporting.