U.S. markets closed higher Thursday after the release of better manufacturing data and a rise in existing home sales, which offset higher jobless claims. Key discretionary retailers beat earnings expectations, bolstering stocks in the sector. Small caps also bounced, indicating a return of risk-on appetite. Dollar Tree, Lowe's, Best Buy and Williams-Sonoma were among discretionary stocks gaining on Thursday. The HSBC Flash China Manufacturing PMI rebounded to 49.7 in May, up from 48.1 in April while the the U.S. Markit Flash PMI Manufacturing Index for May hit a three-month high, rising to 56.2 up from 55.4 in April. Jane Searle reports from the New York Stock Exchange.