By Victor Reklaitis, MarketWatch
NEW YORK (MarketWatch) -- U.S. stocks finished with solid gains
on Thursday after a choppy start to the session, shaking off losses
that came amid downbeat reports from the Philadelphia Federal
Reserve, China and Europe.
Traders found encouragement in a gauge of U.S. manufacturing
jumping to its highest level in almost four years, as well as in
more M&A activity, this time involving Facebook. In addition,
strategists said the market's five-year bull run isn't ready to end
yet.
The Dow Jones Industrial Average (DJI) rose 92.67 points, or
0.6%, to close at 16,133.23, after showing an intraday gain of more
than 100 points. Verizon Communications Inc. (VZ) fared best among
the Dow components, jumping 3.4% after Jefferies analysts said now
is a good time to buy Verizon shares.
The S&P 500 index (SPX) tacked on 11.03 points, or 0.6%, to
end at 1,839.78, with the telecom sector performing best among
S&P sectors. The benchmark index has advanced in eight out of
the past 10 sessions, nearing its Jan. 15 record close of
1,848.38.
The Nasdaq Composite (RIXF) advanced 29.59 points, or 0.7%, to
finish at 4,267.55.
"Panic if you must over discussion of a shift in interest rates
or use WalMart's earnings as a barometer for consumer health if you
choose," said Andrew Wilkinson, chief market analyst at Interactive
Brokers, in emailed comments on Thursday. There are also "changing
probabilities of financial tempest in other parts of the globe" he
added.
But in the absence of such problems overseas, "the bull is
likely to charge unchecked," Wilkinson said. He also said: "The
domestic economy continues to heal nicely and this year will
undoubtedly be better than last."
While the S&P 500 has wavered this week as it nears its Jan.
15 record, technical analysts said that's not surprising. With one
trading day left in the holiday-shortened week, the index is
essentially flat -- up less than 0.1%.
Market experts "feel the need to rationalize every retreat in
equity prices," said Sam Stovall, chief equity strategist at
S&P Capital IQ, in a note late Wednesday. But the market is
actually just "following the traditional pattern required to break
above price resistance by making several attempts before that rusty
door finally swings open," Stovall said.
The strategist added: "From a technical perspective, the S&P
500 is challenging the January high after recovering more than 100
points from the early February lows, and we continue to anticipate
further upside on this run."
In economic news on Thursday, the Philadelphia Federal Reserve's
manufacturing index dropped sharply to a reading of negative 6.3 in
February from a 9.4 reading in January, well below a
MarketWatch-compiled economist forecast of 7.3.
On the upside, Markit's U.S. flash purchasing managers index
jumped to its highest level in almost four years, rising to 56.7 in
February.
In addition, the number of Americans who applied for
unemployment benefits last week edged down by 3,000 to 336,000,
indicating little change in the U.S. labor market and roughly
meeting expectations, while consumer prices rose a seasonally
adjusted 0.1% in January, matching forecasts.
In China, a key gauge showed a larger-than-expected contraction
for manufacturing in the world's No. 2 economy, while in Europe,
Markit data showed business activity in the euro zone lost momentum
in February, owing to weakness in France.
On Wednesday, U.S. stocks closed lower after the Federal
Reserve's latest meeting minutes showed no real consensus about
when short-term rates would begin to rise.
Among individual stocks, Facebook Inc. (FB) closed up 2.3%,
erasing early losses. Late Wednesday, the company stunned Wall
Street with a deal to buy messaging service WhatsApp. There was
some speculation that perhaps the social-media giant paid too
much.
The deal comes shortly after M&A activity in the cable,
pharmaceuticals and jewelry industries, indicating some optimism in
corporate boardrooms.
Wal-Mart (WMT) shares finished 1.8% lower after the Dow
component delivered a weaker-than-expected forecast for its
recently started fiscal year and current quarter.
Tesla Motors Inc. (TSLA) shares rose 8.4% after the electric-car
company swung to an adjusted profit in the fourth quarter.
Safeway Inc. (SWY) closed up 2.1% after it said it's holding
talks on the possible sale of the company, though no deal has yet
been reached.
Shares of PepsiCo Inc.(PEP) tacked on 1.2% after The Wall Street
Journal reported that Nelson Peltz's Trian Fund Management LP is
renewing an effort to break up the company.
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