Big gains in shares of Palm (NASDAQ: PALM) and Level 3 (NASDAQ: LVLT) led the stock market to new highs for the year on Thursday, but a late bout of selling erased most of the day's gains.

Palm shares jumped 12% after the company named a former exec from rival Apple (NASDAQ: AAPL) as its new CEO. Apple shares ended the day modestly lower, while Research in Motion (NASDAQ: RIMM) rose more than 2%.

Level 3 added 24% on top of a 19% gain yesterday on reports that the company is discussing a long-distance joint venture with Sprint (NYSE: S).

The Nasdaq rose 9 to 1862, the S&P 500 climbed 5 to 944, and the Dow added 31 to 8770.

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