* Jobless claims rise modestly, but less than expected
* Research in Motion rises on deal talk
* Indexes up: Dow 0.4 pct, S&P 0.6 pct, Nasdaq 0.8 pct
* For up-to-the-minute market news see [STXNEWS/US] (Updates to midmorning)
By Ryan Vlastelica
NEW YORK, Oct 6 (Reuters) - U.S. stocks floated higher in volatile trading on Thursday as plans to shore up stressed European banks moved into higher gear and the head of European Central Bank warned about increased risk in the region.
Wall Street rallied for a third straight session, but the earlier gains came after markets soared late in the day. The S&P 500 index gained 4.1 percent over that period. For details, see [ID:nN1E7940Q3]
In the first hour of trading Thursday, the S&P fell as much as 0.8 percent before rebounding to rise as much as 0.4 percent as investors reacted to headlines out of Europe.
ECB President Jean-Claude Trichet said the economic outlook "remains subject to particularly high uncertainty and intensified downside risks" after the ECB kept interest rates on hold, though some investors had hoped for a cut. [ID:nL5E7L616W] and [ID:nECBNEWS]
Anxiety over the region's lingering debt crisis has pressured equities and pushed the S&P briefly into bear market territory earlier this week.
Markets have been whipsawed on a near-daily basis by Europe. "People thought there would be more support for Europe coming out of institutions like the ECB, and keeping rates steady is another curveball," said Michael Mullaney, a portfolio manager who helps manage $9.5 billion at Fiduciary Trust Co in Boston.
"This is a very fickle market, especially since there's fatigue after two hefty days in a row," Mullaney added. "We're trading not just on news, but also on mood."
The Dow Jones industrial average <.DJI> was up 43.21 points, or 0.39 percent, at 10,983.16. The Standard & Poor's 500 Index <.SPX> was up 6.69 points, or 0.58 percent, at 1,150.72. The Nasdaq Composite Index <.IXIC> was up 20.72 points, or 0.84 percent, at 2,481.23.
Yahoo Inc
U.S.-listed shares of Research in Motion Ltd
Apple Inc
New claims for unemployment benefits rose less than expected last week, hinting at an improved labor market a day before the closely watched September non-farm payrolls report. [ID:nOAT004875]
On Friday, the government will report non-farm payrolls data, which is expected to show a return to growth after flat growth in August. On Wednesday, a report from payrolls processor ADP showed overall private payrolls rose by 91,000, topping forecasts. (Editing by Jeffrey Benkoe)