STOCKS advanced modestly with bonds in New York after sitting flat for most of the session. But trading continued at a nervous crawl ahead of Friday's unemployment report, which may provide a clearer indication on the pace of inflation.

Since setting a record at 5778.00 two weeks ago, the Dow Jones has been pressured by profit taking with investors growing anxious about inflation and interest rates. The financial markets plunged after the last three monthly readings, which reignited worries that rising payroll levels and wages would translate into rapid inflation by creating too much spending power and too much demand.

The NYSE's composite index rose 2.58 to 363.38, and the Standard and Poor's 500 stock index rose 5.88 to 678.44.

The Nasdaq composite index rose 5.80 to 1,249.48, and the American Stock Exchange's market value index rose 0.83 to 608.27.