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Mark Lennihan, Associated Press
This July 15, 2013 file photo shows the New York Stock Exchange in New York.

NEW YORK — Stocks moved slightly higher in afternoon trading Thursday after the government reported that the number of people applying for unemployment benefits sank last week, a sign that employers are laying off fewer people. Hillshire Brands soared after Tyson Foods made a rival bid for the company.

KEEPING SCORE: The Standard & Poor's 500 index rose nine points, or 0.5 percent, to 1,919 as of 3:30 p.m., eight points above its record close of 1,911 reached on Tuesday. The Dow Jones industrial average rose 56 points, or 0.3 percent, to 16,689 and the Nasdaq composite rose 20 points, or 0.5 percent, to 4,245. Stocks have been higher throughout the day and were trading near session highs into the close.

TASTES LIKE CHICKEN: Hillshire Brands shot up $8.03, or 18 percent, to $52.84. Chicken company Tyson Foods made a $6.2 billion offer for the deli meats and hotdog maker, two days after Pilgrim's Pride bid $5.58 billion for the company. Hillshire is already trading above Tyson's offer of $50 per share. Tyson also rose on the news. The stock gained $2.52, or 6 percent, to $43.27.

HUNGRY HUNGRY INVESTORS: Other food companies also rose following the Hillshire Brands news as traders anticipated more deals and possibly more bidding wars. Jam and jelly maker J.M. Smucker rose $2.12, or 2 percent, to $102.74. Hormel Foods, which makes Spam, rose 95 cents, or 2 percent, to $48.66.

M&A LEADS THE WAY: While the overall stock market has moved little this year, one theme that continues to play out is the large amount of corporate deals being announced. Apple said late Wednesday it was buying Beats Electronics for $3 billion, and now there's a bidding war for Hillshire Brands.

"It's an encouraging sign because companies see the economy improving," said Joe Tanious, a global markets strategist with J.P. Morgan Asset Management. "Last thing you want to do as a large company is use your cash to buy a company when you have an uncertain outlook on the economy."

WRONG WAY: News on the economy was mixed. The Commerce Department said Thursday that the U.S. economy shrank at an annual rate of 1 percent in the first three months of the year, worse than the government's initial estimate a month ago of growth of 0.1 percent. The contraction was partly due to the severe weather in January and February, economists said. Investors expect the economy should rebound in the April-June period.

However, the government also said the number of Americans applying for unemployment benefits dropped last week to 300,000, according to the Labor Department. The less-volatile four-week average fell to 311,500, the lowest since August 2007.

'ALL QUIET': The stock market continues to hit highs, but volume remains light after the Memorial Day holiday. Traders expect business to be slow until next week, when investors get the May jobs report and the European Central Bank will announce is latest interest rate decision.

"We may be moving higher, but the market is really in wait-and-see mode," said Ryan Larson, head of equity trading at RBC Global Asset Management.

BONDS: The yield on the 10-year Treasury note traded at 2.44 percent, unchanged on the day. Bond yields have been trading at lows not seen in a year, as foreign buyers have jumped into U.S. Treasurys. Most investors believe this recent downward movement in bond yields is temporary. The Federal Reserve, the biggest buyer of Treasurys for the last few years, is slowly exiting the market and the economy is improving.

"The 10-year Treasury has everyone scratching their heads," Tanious said.