NEW YORK (TheStreet) -- Equities cheered better manufacturing growth and a doozy of a Chinese IPO on Thursday, rebounding after a sluggish start amid higher jobless claims.
Rising U.S. home sales further helped sentiment, while indicators of fresh risk appetite were apparent: consumer discretionary stocks outstripped the broader market and small caps were bouncing more than 1% in afternoon trade.
The turn in discretionary stocks may be equally due to investors seeking pockets to exploit as a reaction to better sector earnings: consumer companies are the worst-performing among key industries this year, down 3.5% after jumping 41% in last year's rally.
The Fed's mostly positive economic outlook on Wednesday also underpinned confidence - if the forecast is brighter, perhaps discretionary hasn't been overcooked despite those toppy valuations. The central bank's concerns around housing growth were also soothed, at least temporarily, by data today.
Among Thursday's notable retail bouncers were Best Buy (BBY), Williams-Sonoma (WSM) and Dollar Tree (DLTR), all of which beat earnings expectations. Homebuilders also rode better sector data - D.R. Horton (DHI) and PulteGroup (PHM) tacking on more than 2%.
While the market slides sideways, some IPOs are splashing big-time: China's largest online seller JD.com (JD) broke records for a Chinese firm listing shares in the U.S. yesterday - raising $1.78 billion with an IPO that values it at $26 billion. Alibaba will be a cracker if that's anything to go by.
So stocks edge higher, with sharper focus on the ECB as the month end draws near: calls for stimulus are getting louder and there's even talk of negative interest rates. All up, plenty of reason for American bulls to feel quietly confident.
-- By Jane Searle in New York
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