By Victor Reklaitis, MarketWatch
NEW YORK (MarketWatch) -- U.S. stocks finished with solid gains on Thursday after a choppy start to the session,
shaking off losses that came amid downbeat reports from the Philadelphia Federal Reserve, China and Europe.
Traders found encouragement in a gauge of U.S. manufacturing jumping to its highest level in almost four years, as
well as in more M&A activity, this time involving Facebook. In addition, strategists said the market's five-year bull
run isn't ready to end yet.
The Dow Jones Industrial Average (DJI) rose 92.67 points, or 0.6%, to close at 16,133.23, after showing an intraday
gain of more than 100 points. Verizon Communications Inc. ( VZ ) fared best among the Dow components, jumping 3.4% after
Jefferies analysts said now is a good time to buy Verizon shares.
The S&P 500 index (SPX) tacked on 11.03 points, or 0.6%, to end at 1,839.78, with the telecom sector performing best
among S&P sectors. The benchmark index has advanced in eight out of the past 10 sessions, nearing its Jan. 15 record
close of 1,848.38.
The Nasdaq Composite (RIXF) advanced 29.59 points, or 0.7%, to finish at 4,267.55.
"Panic if you must over discussion of a shift in interest rates or use WalMart's earnings as a barometer for consumer
health if you choose," said Andrew Wilkinson, chief market analyst at Interactive Brokers, in emailed comments on
Thursday. There are also "changing probabilities of financial tempest in other parts of the globe" he added.
But in the absence of such problems overseas, "the bull is likely to charge unchecked," Wilkinson said. He also said:
"The domestic economy continues to heal nicely and this year will undoubtedly be better than last."
While the S&P 500 has wavered this week as it nears its Jan. 15 record, technical analysts said that's not surprising.
With one trading day left in the holiday-shortened week, the index is essentially flat -- up less than 0.1%.
Market experts "feel the need to rationalize every retreat in equity prices," said Sam Stovall, chief equity
strategist at S&P Capital IQ, in a note late Wednesday. But the market is actually just "following the traditional
pattern required to break above price resistance by making several attempts before that rusty door finally swings open,"
The strategist added: "From a technical perspective, the S&P 500 is challenging the January high after recovering more
than 100 points from the early February lows, and we continue to anticipate further upside on this run."
In economic news on Thursday, the Philadelphia Federal Reserve's manufacturing index dropped sharply to a reading of
negative 6.3 in February from a 9.4 reading in January, well below a MarketWatch-compiled economist forecast of 7.3.
On the upside, Markit's U.S. flash purchasing managers index jumped to its highest level in almost four years, rising
to 56.7 in February.
In addition, the number of Americans who applied for unemployment benefits last week edged down by 3,000 to 336,000,
indicating little change in the U.S. labor market and roughly meeting expectations, while consumer prices rose a
seasonally adjusted 0.1% in January, matching forecasts.
In China, a key gauge showed a larger-than-expected contraction for manufacturing in the world's No. 2 economy, while
in Europe, Markit data showed business activity in the euro zone lost momentum in February, owing to weakness in France.
On Wednesday, U.S. stocks closed lower after the Federal Reserve's latest meeting minutes showed no real consensus
about when short-term rates would begin to rise.
Among individual stocks, Facebook Inc. ( FB ) closed up 2.3%, erasing early losses. Late Wednesday, the company stunned
Wall Street with a deal to buy messaging service WhatsApp. There was some speculation that perhaps the social-media
giant paid too much.
The deal comes shortly after M&A activity in the cable, pharmaceuticals and jewelry industries, indicating some
optimism in corporate boardrooms.
Wal-Mart (WMT) shares finished 1.8% lower after the Dow component delivered a weaker-than-expected forecast for its
recently started fiscal year and current quarter.
Tesla Motors Inc. ( TSLA ) shares rose 8.4% after the electric-car company swung to an adjusted profit in the fourth
Safeway Inc. ( SWY ) closed up 2.1% after it said it's holding talks on the possible sale of the company, though no deal
has yet been reached.
Shares of PepsiCo Inc.( PEP ) tacked on 1.2% after The Wall Street Journal reported that Nelson Peltz's Trian Fund
Management LP is renewing an effort to break up the company.
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