NEW YORK (
) -- Major U.S. stock averages rebounded Thursday after the
worst slump in five weeks the day before. Investors cheered better-than-expected economic growth and grew confident President Obama and Republicans would soon work out a deal to avert the "fiscal cliff."
Dow Jones Industrial Average
climbed 60 points, or 0.45%, to 13,312. The blue-chip index began the session up 8.4% this year.
tacked on 8 points, or 0.55%, at 1,444.
Breadth was slightly positive, with gainers outpacing laggards 25 to five.
Bank of America
were among the winners in the Dow.
rose 6 points, or 0.20%, to 3,050.
The broader market sectors were trading higher, with conglomerates, financials, consumer cyclicals, energy and capital goods leading the way.
Advancers edged decliners by a ratio of just 2.1-to-1 on the New York Stock Exchange and 1.6-to-1 on the Nasdaq. Volumes totaled 3.63 billion shares on the Big Board and 1.68 billion shares on the Nasdaq.
"While negotiations on the fiscal cliff have stalled over the last couple of days, the likelihood of going past year-end without any resolution has not increased," Goldman Sachs economists said in a report. "This is due, in part, to progress made to date in negotiations between President Obama and Speaker Boehner. However, it is also because it has become increasingly possible that if those negotiations fail, a fallback plan could be passed to avert at least some of the fiscal restraint scheduled for 2013, with remaining issues potentially revisited in early 2013."
At Boehner's weekly press conference Thursday, he said the House would vote on his "Plan B" later in the day. Senate Majority Leader Harry Reid had said in an earlier appearance that the Senate would flatly reject the deal. Boehner told reporters he was not convinced it would die in the upper chamber of Congress. Boehner said the real issue is about spending, and that the president and Democrats haven't accomplished their part on proposed cuts.
In the economy, the Labor Department reported Thursday that initial jobless claims for the week ended Dec. 15 rose 17,000 to 361,000 from the previous week's upwardly revised figure of 344,000. Economists, on average, expected initial claims to rise to 357,000.
The four-week moving average was 367,750, a decrease of 13,750 from the previous week's unrevised average of 381,500.
Yelena Shulyatyeva, the U.S. economist at BNP Paribas, said 361,000 claims are more consistent with the underlying trend. Job-market conditions have changed little fundamentally in recent months, she said.
Meanwhile, Dan Greenhaus, chief global strategist at BTIG, noted that any improvement in weekly claims "won't matter a bit" if the economy entered the new year with fiscal-cliff-induced uncertainty.
The Bureau of Economic Analysis' third read on third-quarter U.S. gross domestic product was 3.1%, up from the prior estimate of 2.7%. Economists were expecting a read of 2.8%.
"The longer the fiscal cliff stands ahead of us, the greater is the risk to first-quarter growth," said Andrew Wilkinson, chief economic strategist at Miller Tabak.
The National Association of Realtors reported that existing-homes sales rose 5.9% to a seasonally adjusted annual rate of 5.04 million in November from a downwardly revised 4.76 million in October, and are 14.5% higher than the pace registered in November 2011. The consensus forecast called for a November annual rate of 4.87 million.
Sales are at their highest levels since November 2009 with low inventory supply pressuring home prices, the NAR said.
Elsewhere, the Philadelphia
business outlook survey showed a rebound in manufacturing activity in December, with the its broadest measure of manufacturing conditions, the diffusion index of current activity, increasing to 8.1 from minus 10.7 in November. Expectations had been for an improvement to minus 3.
Paul Dales, senior U.S. economist at Capital Economics, noted that U.S. manufacturing surveys have continued to swing "all over the place" but that, beneath the volatility, "manufacturing output is probably stagnating."
The Conference Board's leading economic indicators showed an expected decline of 0.2% in November to 95.8 after a 0.3% increase in October, pointing to rising risks of slowing economic activity.
The Federal Housing Finance Agency's housing price index for October was up 0.5% following a downwardly revised to flat read for the prior month.
Gold for February delivery plunged $21.80 to settle at $1,645.90 an ounce at the Comex division of the New York Mercantile Exchange, while February crude oil contracts gained 15 cents to close at $90.13 a barrel.
The benchmark 10-year Treasury was up 1/32 to dilute the yield to 1.802%. The dollar was losing 0.21%, according to the
U.S. dollar index
In corporate news,
, the operator of the New York Stock Exchange, agreed to be bought by rival
for $33.12 a share in stock and cash, or a total of about $8.2 billion. NYSE Euronext shares soared 34% Thursday.
Bed Bath & Beyond
on Wednesday issued forecasts for the fourth quarter and
fiscal year that were below analysts' views
. Shares shed 6.5%.
posted fiscal first-quarter earnings on Wednesday that
topped Wall Street estimates
. Shares jumped 7.4%.
An experimental treatment from
failed to improve kidney response in Fabry disease patients compared to a placebo in a late-stage study, the companies disclosed late Wednesday. Amicus shares plunged 47%.
posted second-quarter earnings of 57 cents a share on revenue of $3.74 billion, beating the average analyst estimate of 55 cents a share on revenue of $3.69 billion, on robust sales from its consumer-foods business.
The company raised its full-year earnings projection to at least $2.06 a share, in line with expectations. Shares were up 0.67% on Thursday.
posted lower-than-expected quarterly sales and current quarter revenue forecasts that fell short of Wall Street targets as customers become more conservative about spending on consulting projects. Shares closed off 2%.
Research In Motion
, the BlackBerry maker, posted a loss of 22 cents a share on revenue of $2.7 billion. Analysts expected the company to post a fiscal third-quarter loss of 35 cents a share on $2.66 billion in revenue.
RIM, which has steadily been losing market share in the U.S., is banking on reversing its fortunes with BlackBerry 10, the new operating system that will be unveiled at the end of next month. Shares were up 0.42% in the after-hours session.
announced that Glen Tullman has stepped down from his positions as CEO and board member. Allscripts director Paul Black has been named president and CEO, effective immediately. Shares plummeted 14.4%.
DNA sequencing equipment maker
has been approached by
with a sweetened offer, up 48% from a prior failed bid, according to Swiss newspaper
. Shares surged 7.8%.
has agreed to be bought by
in a transaction that puts Roma's value at about $454.4 million. Shares soared 63.6%.
sold half of Motorola Mobility
to broadband/cable TV/networking expert
(ARRS - Get Report)
for $2.3 billion. The half sold is known as Motorola Home and specializes in television set-top boxes. Arris shares tacked on 3.6%.
-- Written by Andrea Tse and Joe Deaux in New York.
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