Stocks Rise; Google Beats

NEW YORK ( TheStreet) -- Stocks posted gains Thursday, aided by strong corporate earnings and good manufacturing data, as investors shrugged off disappointing jobs data. After the close, Google ( GOOG) reported earnings that beat expectations.

The Dow Jones Industrial Average added 21 points, or 0.2%, to 11,145. The S&P 500 gained 1 point, or 0.1%, at 1212, while the Nasdaq went ahead by 11 points, or 0.4%, at 2516.

After the close of trading, Google said thriving ad sales helped it earn $6.76 per share, excluding items, in the first quarter and boosted revenue by 23%, topping forecasts on both counts. Shares added 1.1% during the session to finish at $595.30, but were selling off in extended hours trading with some reports citing increasing costs as a worry for investors. Also, CEO Eric Schmidt did not participate in the after hours earnings call.

The day's economic news offered a mixed view of the recovery. Initial jobless claims unexpectedly rose to 484,000 and industrial production grew at a sluggish pace in March. Regional manufacturing indices, however, showed continued strength.

U.S. foreclosure rates surged 35% in the first quarter, according to RealtyTrac.

China's gross domestic product rose 11.9% in the first quarter, while inflation remained low at 2.2%.

Overseas, Hong Kong's Hang Seng gained 0.2%, and Japan's Nikkei advanced 0.6%. The FTSE in London was added 0.5% while the DAX in Frankfurt rose 0.2%.

London's Heathrow Airport -- Europe's busiest -- closed operations Thursday after a volcano in Iceland forced authorities to close air space in the U.K. and Scandinavia.

The Economy

Initial jobless claims unexpectedly rose in the week ended April 10 to 484,000 from 460,000 in the previous week. Economists had expected 440,000 claims.
Unemployment

Manufacturing activity in the New York region rose to the highest level in six months in April, according to the Empire State Manufacturing index . The month's reading came in at 31.86, compared with March's reading of 22.86.

Capacity utilization in March rose to 73.2% from 73% in February. March industrial production , meanwhile rose 0.1%, after gaining 0.3% in February. Wall Street had expecting utilization to come in at 73.3% and industrial production to gain 0.7% in March.

The Philadelphia Fed Index rose to a better-than-expected reading of 20.2 in April from 18.9 previously. Economists had anticipated a reading of 20 for the month.

Company News

Joining Google in announcing earnings after the closing bell, Advanced Micro Devices ( AMD) said it bounced back to an adjusted profit of 9 cents a share during the first quarter after posting a loss in the year-earlier period. Analysts expected another loss of 7 cents a share in this latest quarter, according to Briefing.com. News of the number two chipmaker's surprise profit followed Intel's ( INTC) blockbuster earnings announcement earlier in the week.

Intuitive Surgical ( ISRG), maker of a robotic surgical system known as da Vinci, posted better-than-expected earnings of $2.12 a share in the afternoon.

Shares of Capital One Financial ( COF) traded 2% lower after the bank reported increased credit card charge-offs in March after declining delinquencies in the both the prior-month period and in the latest 30-day period.

Charles Schwab ( SCHW) saw its stock shed 5 cents, or 0.3%, to $19.30 after the financial holding company reported a 45% plunge in first-quarter earnings, which was in line with the low end of its own guidance.

Energy companies Apache ( APA) and Mariner Energy ( ME) are merging. Under the agreement, Mariner shareholders would receive 0.17043 a share of Apache common stock and $7.80 in cash for each outstanding share of Mariner common stock. Apache's stock declined 1.3% while Mariner's stock soared 42%.

Peabody Energy ( BTU) sweetened its bid for Australia's Macarther Coal by 14%, topping an offer from New Hope.

JB Hunt Transport Services ( JBHT) beat estimates with a profit of 29 cents a share and sales of $845 million. Its stock improved 1.7%.

UPS ( UPS) saw shares advance 5.3% after the package-delivery company pre-announced a first-quarter profit of 71 cents a share. Analysts had been projecting earnings of 58 cents a share.

Transportation stocks moved decidedly higher on the news, making them the big winner on the day, as the Dow Jones Transportation Average added 1.7% and the Nasdaq Transportation index improved 2.3%.

Late Wednesday, Yum! Brands ( YUM) reported better-than-expected first-quarter results but issued year-end guidance that was slightly lower than analysts' estimates. The fast-food chain operator's stock added another 2.6% today.

Shares of MGM Mirage ( MGM) finished 5.5% lower after it warned it would report a wider-than-expected first-quarter loss.

Citing unnamed persons briefed on the goings on, The New York Times DealBook blog reported preliminary merger talks have resumed between Continental Airlines ( CAL) and United Airlines parent UAL ( UAUA). Last week, the same blog broke the news that United Airlines and US Airways ( LCC) began their own preliminary merger negotiations.

Commodities and the Dollar

Natural gas for May delivery settled 21 cents lower at $3.99 per million British thermal units, after a reported 87 billion cubic feet increase in supplies, according to the Energy Information Administration's weekly storage report. Analysts surveyed by Platts had been looking for a gain in the range of 76 to 80 billion cubic feet.

The May crude oil contract traded 33 cents lower, finishing at $85.51 a barrel. The June gold contract, meanwhile, added 70 cents to settle at $1,160.30 an ounce.

The dollar was trading higher against a basket of currencies, with the dollar index up by 0.4%.

Treasuries

The benchmark 10-year Treasury rose 6/32, dropping the yield to 3.842%.

The two-year note rose 2/32, weakening the yield to 1.024%. The 30-year bond strengthened 6/32, diluting the yield to 4.722%.

--Written by Melinda Peer and Sung Moss in New York.