Stocks Close Higher as Markets Cheer Jobs Data


NEW YORK (TheStreet) -- Stocks closed higher as investors weighed improved reads on jobless claims data against disappointing manufacturing and construction spending numbers.

The Dow Jones Industrial Average finished up 28.2 points, or 0.2%, at 12,980. The S&P 500 rose 8.4 points, or 0.6%, at 1374. The Nasdaq gained 22.1 points, or 0.7%, at 2989.

Initial jobless claims fell 2,000 to 351,000 during the week ended Feb. 25 from a revised 353,000 in the previous week, according to a Labor Department report. Claims data met analysts' expectations according to Thomson Reuters. The four-week moving average fell 5,500 to 354,000 from a revised 359,500.

However, stocks pared gains slightly after the Institute for Supply Management reported that its manufacturing index dropped to 52.4 in February. While the data showed that manufacturing is still expanding, it missed expectations for a reading of 54.5, according to economists polled by Thomson Reuters. The index came in at 54.1 in the prior month.

The Commerce Department's reading on construction spending dropped 0.1% in January for the first time in six months. Economists polled by Thomson Reuters expected it to tick 1% higher, adding to a 1.5% rise the prior month.

Personal incomes rose 0.3% to $37.4 billion in January according to a Commerce Department report, falling just short of expectations of a 0.4% rise according to analysts polled by Thomson Reuters. Personal spending rose 0.2% to $23.2 billion for the month, again falling short of expectations of a 0.3% increase.

Ian Sheperdson, economist with High Frequency Economics, notes that consumers may have spent less on utility services due to exceptionally warm weather. "Since its July peak, we reckon monthly spending on utilities has dropped by some 17%; we expect a rebound over the next few months. Still, the soft November, December and weak Jan mean first quarter spending will likely rise only 1%."

Stocks opened March with more gains after February closed with the Dow up 6% and the S&P 500 up 8.6% so far in 2012. In the prior session, the market finished lower after Federal Reserve chief Ben Bernanke suggested that the economy didn't warrant further economic stimulus.

"The market is headed for a breather period after a very good start to the year," said Tom Villalta, lead portfolio manager with Jones Villalta Asset Management. "We're going to see a fair amount of volatility from now until mid-April," he added, explaining that first quarter earnings would likely be the next major catalyst for the market.

In Europe, a two-day summit kicked off at which eurozone leaders will discuss how to increase the region's bailout fund. The meeting comes after international creditors at a G20 meeting put pressure on Europe to increase its own funding before asking for additional outside resources. After the summit wraps up Friday, European Union leaders are expected to finalize Greece's $173 billion aid package, according to Bloomberg.

Earlier Thursday, borrowing costs fell at a Spanish bond auction, the first since the European Central Bank loaned billions of euros to the region's financial system. The country paid a 2.07% yield on the two-year bond, whose yield broke above 6% back in November. Investors are expected to be repaid in interest by the Spanish government before they need to return their three-year loans to the ECB.

Germany's DAX closed up 1.25% while London's FTSE was up 1.02%. Japan's Nikkei Average settled down 0.16% and Hong Kong's Hang Seng was down 1.35%.

In corporate news, Ford ( F) said that its U.S. sales climbed 14% in February year over year. General Motors' ( GM) sales were up 1.1% with new models helping drive gains in Chevrolet. Shares of the two companies were up 2.3% and 1.6%, respectively.

Sunnyvale, Calif.-based Finisar ( FNSR) reported non-GAAP earnings of $21.9 million, or 23 cents a share, in the three months ended Jan. 29, up slightly from an equivalent profit of $21.5 million, or 23 cents a share, in the second quarter ended in October. Revenue totaled $243 million in the latest quarter, up 0.6% from $241.5 million in the second quarter. The average estimate of analysts polled by Thomson Reuters was for earnings of 22 cents a share in the third quarter on revenue of $245 million. Shares rose 4.1% to $21.13.

Pet products retailer PetSmart ( PETM) reported fourth-quarter profit of $102 million, or 91 cents a share on sales of $1.64 billion, beating the average analyst estimate of earnings of 90 cents a share on sales of $1.62 billion. The company is forecasting 2012 earnings of $3.02 to $3.16 a share, above consensus projections of $2.54 a share according to a Thomson Reuters poll. Total sales growth should come in between 7.5% to 8.5%, which is essentially in line with estimates. Shares fell 0.5% to $55.45.

Fast-food chain Wendy's ( WEN) has reported fourth-quarter income from continuing operations of $4.3 million, or 4 cents a share on revenue of $615 million. The Wall consensus predicted earnings of 3 cents a share on revenue of $609.1 million. Shares were down 0.4% to $5.05.

Bank of America ( BAC) plans to introduce a monthly fee for customers with basic checking accounts unless they agree to bank online, buy more products or maintain certain balances, according to The Wall Street Journal . Bank of America pilot programs in Arizona, Georgia and Massachusetts now are experimenting with charging $6 to $9 a month for an "Essentials" account, the newspaper said, which cited a memo distributed to employees. Last fall, the bank pulled back from introducing a new $5 debit-card charge after customers criticized the move. Shares were up almost 2%.

April oil futures settled up $1.77 to $108.84 a barrel. In other commodities, April gold futures closed up $10.90 to $1,722.20 an ounce, rebounding from a 5% price drop in the prior session.

The dollar index was 0.01% lower. The benchmark 10-year Treasury was down 16/32, pushing the yield above 2%.

-- Written by Chao Deng and Andrea Tse in New York.

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