The stock market edged higher Thursday after the government reported that businesses increased inventories by a larger-than-expected amount in November.

The gain in inventories is a welcome sign for the economy and suggests that businesses are feeling more confident that sales will pick up. It was the second straight month that stockpiles increased after a stretch of 13 monthly declines.

The positive news on inventories outbalanced weaker reports on retail sales and initial unemployment claims. The Commerce Department said business inventories rose by 0.4 per cent in November, double the increase economists expected.

There was also positive news from SAP, a major business software maker based in Germany. SAP said its fourth-quarter revenue fell less than it had forecast, providing some reassurance that companies are becoming more willing to invest in technology. Investors are also watching closely to see if companies can bolster their earnings with solid revenues instead of just continuing to cut costs.

Later Thursday, the market will dissect an earnings report from a key bellwether of the U.S. technology industry, leading chip maker Intel Corp. Investors see Intel’s earnings as a telling sign of business and consumer demand in the overall economy.

In less encouraging news, the Labour Department reported that workers seeking unemployment benefits for the first time rose by 11,000 last week, more than the 3,000 economists had expected. The jump was due partly to typical seasonal layoffs in the retail, manufacturing and construction industries.

Investors are becoming accustomed to seeing jagged indicators on the economy and have generally not lost their cool on the occasional poor economic report. However, analysts widely believe that there will need to be a meaningful pickup in job creation — the worst remaining trouble spot in the U.S. economy — if a 10-month stock rally is to continue.

In midmorning trading, the Dow Jones industrial average rose 22.14, or 0.2 per cent, to 10,702.91. The broader Standard & Poor’s 500 index rose 2.35, or 0.2 per cent, to 1,148.03, and the Nasdaq composite index rose 9.20, or 0.4 per cent, to 2,317.10.

Demand for the safety of government debt increased. Treasury prices rose, pushing yields lower. The yield on the benchmark 10-year note fell to 3.77 percent from 3.80 per cent late Wednesday.