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) -- U.S. stocks showed modest gains Thursday on stronger-than-expected U.S. economic growth combined with a drop in jobless claims while fears of an imminent U.S. military intervention against Syria appeared to be easing.


S&P 500

rose 0.2% to 1,638.17 while the

Dow Jones Industrial Average

was adding 0.1% to 14,840.41. The


jumped 0.8% to 3,620.30.

The market's guarded advance suggests that investors continue to view the economic recovery as muted, and that signs of strength may soon prompt the

Federal Reserve

to begin to curb its bond-buying stimulus measures, possibly as early as next month. The central bank's support has fueled equity markets for close to two years.

"I don't think yet we have reversed enough of those ... technical and sentiment factors to suggest we're out of the woods here," said Liz Ann Sonders, chief investment strategist at Charles Schwab. "There's some thoughts that we could have a bounce here; it looks like the market tried to do it today, it failed a little bit."

The benchmark 10-year Treasury was plunging 14/32, boosting the yield to 2.819% amid the Fed taper concerns.

"With the U.S. economy growing in line with the Federal Reserve's forecasts from June, there is reason to believe that the Fed will move ahead with its plan to reduce the pace of QE3 next month," Christopher Vecchio, a New York-based DailyFX analyst said in a report.

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The second estimate for U.S. second-quarter gross domestic product showed a gain of 2.5%, up from the advance estimate of a 1.7% rise and better than the 2.2% growth expected by economists, the Bureau of Economic Analysis reported.

On the labor market front, initial jobless claims for the week ended Aug. 24 fell by 6,000 to 331,000, according to the Labor Department. Economists on average were expecting claims of 332,000. Meantime continuing claims for the week of Aug. 17 decreased by 14,000 to 2.989 million versus the average economist estimate of 2.98 million.

"The jobs numbers, at least on the surface, have suggested a higher pace of GDP growth than what we've been getting -- there's been this disconnect," said Sonders. "I think the

GDP revision up today tells you that the number that was not quite getting it right was the GDP number."

Heavyweight telecomm stock

Verizon Communications

(VZ) - Get Verizon Communications Inc. Report

was the biggest gaining stock in the S&P, climbing 2.7% to $47.81. Meanwhile


(VOD) - Get Vodafone Group Plc Report

American depositary receipts were surging 8.1% to $31.79. The stocks were pushing the markets higher amid joint venture sale talks.

Vodafone confirmed Thursday that it's in talks with Verizon to sell its 45% stake in their joint venture,

Verizon Wireless


The Wall Street Journal

reported Wednesday that the two companies had rekindled


in a deal that likely would cost Verizon well more than $100 billion. Vodafone said Thursday there is no certainty an agreement will be reached.

Also automaker


(F) - Get Ford Motor Company Report

was advancing 3% to $16.50. The company's Flat Rock, Mich., plant will start making the Fusion Thursday, the first time the car is being made in the U.S. Ford hired a second shift of 1,400 new workers to make the Fusion at the plant, which also makes the Mustang.

The plant will be able to produce 350,000 Fusions a year, 30% more than Ford makes at its plant in Hermosillo, Mexico, according to

The Associated Press



(MNKD) - Get MannKind Corporation Report

was adding on 1.3% to $5.87 as the development-stage biopharmaceutical company tries

to assure shareholders

that key officers still had confidence in the company and were not selling stock.

President Barack Obama told

PBS NewsHour

Wednesday that the conclusion is that the Syrian government definitely carried out chemical weapons attacks against civilians in the country, and therefore there needs to be "international consequences." However, he hasn't yet decided on moving forward with military action in Syria.

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-- Written by Andrea Tse and Joe Deaux in New York

>To contact the writer of this article, click here:

Andrea Tse