* Initial jobless claims fall more than expected
* Financials come off highs amid risk aversion
* Indexes up: Dow 0.1 pct; S&P 0.3 pct; Nasdaq 0.2 pct (Updates to midafternoon)
By Leah Schnurr
NEW YORK, Sept 9 (Reuters) - U.S. stocks rose modestly on Thursday as better-than-expected jobs and trade data added to optimism over the economic recovery.
Indexes came off their highs for the day, however, as oil prices turned negative and a news report said Deutsche Bank was weighing a share sale of up to $11.4 billion.
"We might have a little bit of risk aversion going on since those Deutsche Bank headlines came out about the capital raise," said David Lutz, managing director of trading, Stifel Nicolaus Capital Markets in Baltimore.
The Dow Jones industrial average added 10.97 points, or 0.11 percent, to 10,397.98. The Standard & Poor's 500 Index gained 3.62 points, or 0.33 percent, to 1,102.49. The Nasdaq Composite Index rose 3.31 points, or 0.15 percent, to 2,232.18.
Deutsche's U.S.-listed shares fell 2.9 percent to $60.19 after a Bloomberg report cited people with knowledge of the discussions who said the German bank has approached investment banks to assess their interest in managing a stock sale to raise as much as 9 billion euros ($11.4 billion).
Lutz added there seemed to be some confusion as to whether the German bank was raising money to cover sovereign debt exposure or increase its stake in Deutsche Postbank.
The S&P had initially gained as much as 1 percent after data showed new claims for unemployment insurance fell to their lowest level in two months last week, while the U.S. trade deficit narrowed sharply in July.
But some expressed skepticism over the data as a Labor Department official said some states had been unable to submit claims because of Monday's Labor Day holiday, resulting in the department making estimates for them. For details, see
Healthcare shares led the way up with the S&P healthcare index up 1.1 percent. Financial stocks were among the gainers, though shares came off their highs. Bank of America Corp added 0.9 percent to $13.48 and the KBW bank index rose 0.9 percent.
Concerns about the European banking sector have weighed on investors this week with new capital rules being discussed.
Indexes remained on track to rack up their sixth day of gains in the last seven sessions in what was expected to be low volume as the Jewish New Year was celebrated. The six lowest volume days of the year have come in the last month.
Fears of a double-dip recession have kept investors at bay in recent months. The broad S&P appeared to be finding strength at the upper end of a trading range between 1,040 and 1,130.
The Dow's gains were also limited by McDonald's Corp, which dropped 2.5 percent to $74.18 after its August sales in Europe were softer than expected. (Reporting by Leah Schnurr; Additional reporting by Edward Krudy; Editing by Kenneth Barry)