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Stocks wobble as investors keep eyes on Washington

Matthew Craft, AP Business Writer

Trader Thomas McCauley, left, works on the floor of the New York Stock Exchange Thursday, Dec. 6, 2012. The U.S. stock market wobbled between small gains and losses in early trading Thursday. (AP Photo/Richard Drew)

NEW YORK (AP) -- The stock market wobbled between small gains and losses in afternoon trading Thursday.

The Dow Jones industrial average was up 11 points at 13,045 shortly after 2 p.m. EST.

Apple rose $10 to $548.82, a day after taking its worst fall in four years. In separate interviews, CEO Tim Cook said Apple will produce one of its Mac computers in the United States next year and will spend $100 million in 2013 to shift production of the line from China.

The Standard & Poor's 500 index rose three points to 1,412, while the Nasdaq composite climbed 17 points to 2,990.

Investors' biggest concern remains the collection of automatic tax increases and federal spending cuts scheduled to start Jan. 1. "Everybody is paying close attention to the soap opera in Washington," said John Canally, investment strategist and economist at LPL Financial.

President Barack Obama said Wednesday that the White House and Republicans could reach an agreement "in about a week" if the Republicans drop their opposition to raising taxes on making more than $250,000 a year. That helped give the stock market its first gain of the week.

Most investors believe President Obama and Congressional Republicans will strike a budget deal to avoid this "fiscal cliff" before the year is out. Until they reach an agreement, however, the stock market will likely be hostage to news out of Washington.

"Yesterday was a good day," Canally said. "But we'll probably have a lot of bad days before we're through."

The U.S. Labor Department said unemployment benefits applications dropped 25,000 last week to 370,000, a level consistent with modest hiring. The decline was also a sign that the spike in applications caused by Superstorm Sandy has faded.

The report comes a day before the government releases its closely watched jobs survey. Private economists forecast that hiring in November sank from the previous month. The unemployment rate is expected to remain unchanged at 7.9 percent. Some economists say the storm could cause the Labor Department's hiring figures to be much lower.

In the market for U.S. government bonds, the yield on the 10-year note slipped to 1.56 percent. That's down from 1.59 percent late Wednesday.

Among other stocks making moves Thursday:

— H&R Block jumped 5 percent after posting revenue and earnings that beat analysts' estimates. The country's largest tax preparation company reported a smaller loss, helped by cost-cutting efforts. It typically turns in a loss in the August-to-October period because it takes in most of its revenue during the U.S. tax season. H&R Block gained 82 cents to $18.19.

— The Men's Wearhouse dropped $1.49 to $29.86 after the men's clothing company's third-quarter results missed Wall Street's estimates. The company also cut its full-year and fourth-quarter profit forecasts.

— Sirius XM Radio gained 2 percent after announcing plans to buy back up to $2 billion of its own stock and issue a special dividend of 5 cents per share. Sirius joins the ranks of companies rewarding investors with one-time dividend payments in case taxes on them rise at the end of the year. Its stock gained 5 cents to $2.82.