(Updates to late morning)
* Energy stocks rally as oil climbs to record high
* Wall St rises as job losses not as weak as feared
* Nvidia cuts outlook, curbing Nasdaq's gain
* Brokerage downgrade of Aetna hurts health insurers
By Walker Simon
NEW YORK, July 3 (Reuters) - U.S. stocks rose on Thursday
as energy companies rallied on a new oil price record and job
loss data for June was not as weak as some feared.
Oil hit a peak of $145.85 a barrel before erasing most
gains with the approach of the long holiday weekend marking
U.S. Independence Day on Friday. Exxon Mobil Corp <XOM.N> rose
nearly 2 percent and rival Chevron Corp <CVX.N> gained 1
percent. Exxon and Chevron ranked among the biggest advancers
in both the Dow industrials and the S&P 500.
In a shortened session, with regular trading set to end at
1 p.m. (1700 GMT), volume was light.
On the economic front, the Labor Department said U.S.
employers cut 62,000 workers from their payrolls in June for
the sixth straight monthly decline, but the losses were less
severe than some had feared. Economists polled by Reuters
expected a decline of 60,000 jobs last month.
"The numbers weren't as bad as they could have been," said
Joe Saluzzi, co-manager of trading at Themis Trading in
Chatham, New Jersey. "Some people had feared 100,000 in job
losses or more."
The Dow Jones industrial average <> was up 101.77points, or 0.91 percent, at 11,317.28. The Standard & Poor's
500 Index .SPX> was up 7.05 points, or 0.56 percent, at
1,268.57. The Nasdaq Composite Index <> was up 6.12
points, or 0.27 percent, at 2,257.58.
The Nasdaq rose less than the other major indexes as
semiconductor stocks suffered after graphics chip maker Nvidia
Corp <NVDA.O> cut its sales and profit margin outlook, citing
global market weakness.
Nvidia shares sank 29.8 percent to $12.65 and ranked among
the Nasdaq's biggest percentage losers. The semiconductor
index <.SOXX> shed 0.3 percent.
The dollar's rise helped sentiment since oil is priced in
the U.S. currency, Saluzzi said.
The dollar gained after the U.S. payroll data suggested
the job market had not deteriorated as much as many had feared
while the European Central Bank's president struck a less
aggressive tone on prospects for rate hikes in the euro zone.
U.S. oil futures <CLc1> gained 16 cents to $143.73 a
barrel.
Exxon Mobil shares rose $1.53, or 1.8 percent, to $88.97
and Chevron rose $1.36, or 1.4 percent, to $98.78, both on the
New York Stock Exchange.
Aetna Inc <AET.N> shares dropped 6.8 percent to $37.11 and
Health Net Inc <HNT.N> tumbled 11.3 percent to $22.75 after a
Goldman Sachs analyst slapped "sell" ratings on the two health
insurers' stocks on Thursday.
The Morgan Stanley Healthcare Payor index <.HMO> fell 3.5
percent.
On the economic front, the Institute for Supply Management
reported that the U.S. service sector shrank in June,
surprising Wall Street economists who had expected an
expansion. The report showed inflation pressures soared to a
record high for the survey's 11-year history.
The services data sent the S&P 500 to a session low of
1,252.01 -- more than 20 percent below its October 2007
closing high. To confirm a bear market, the S&P would have to
end the session at that level. On Wednesday, the Dow sank into
bear market territory.
(Editing by Jan Paschal)
