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Stocks Gain After Philly Fed Manufacturing Data Provides Lift

Stocks are higher in mid-day trading after investors shook off rising food and energy prices and an unexpected rise in applications for first-time unemployment benefits and focused instead on an upbeat economic report from the Philly Fed.

The index of manufacturing activity in the Philadelphia region rose in February to its highest level since January 2004, the Federal Reserve Bank of Philadelphia said. The index rose to 35.9 in February from 19.3 in January--higher than the 20.8 expected by economists, reported MarketWatch.

Meanwhile, U.S. consumer prices rose a seasonally adjusted 0.4% in January, the Labor Department reported Thursday, driven by higher food and energy expenses. The core consumer price index, which strips out volatile food and energy costs, rose 0.2%. Economists surveyed by MarketWatch had forecast CPI to rise 0.3% overall, with a 0.1% increase in the core rate. Consumer prices are up 1.6% over the last 12 months. In a related report, the government said average hourly earnings fell 0.1% in January, adjusted for inflation. Real average weekly earnings were down 0.3%.

First-time applications for U.S. unemployment benefits rose last week by 25,000 to 410,000, the Labor Department reporte. Economists polled by MarketWatch had expected initial claims in the week ended Feb. 12 to rise to a seasonally adjusted 400,000 from a revised 385,000 the week before. Continuing claims, which reflect the number of people already receiving unemployment compensation, edged up by 1,000 to a seasonally adjusted 3.91 million in the week ended Feb. 5. About 9.25 million Americans are getting some kind of state or federal benefit in the week ended Jan. 29, down about 108,500 from the prior week.

In company news:

ADRs of AstraZeneca ( AZN ) are down after Bloomberg reported that the drug maker paid $150 million to settle more lawsuits over its antipsychotic drug Seroquel, hit by claims that it causes diabetes. The firm has paid almost $350 million in settlements connected with the drug.

Bank of America ( BAC ) is down after the bank said it will end its personal income tax processing contract with the state of New York. The move could lead to loss of thousands of seasonal jobs, Bloomberg reported. Also, securities litigation firm Klayman & Toskes filed a securities arbitration claim against Merrill Lynch, a subsidiary of Bank of America, on behalf of a retired UPS employee seeking damages of $2.5 mln.

Orexigen Therapeutics ( OREX ) rises after it said Graham Cooper, senior vice president, Finance, CFO and treasurer will resign. It will name Jay Hagan, senior vice president, Corporate Development and Strategy, as acting-CFO and transition the financial operation responsibilities to him.

Shares of Apple ( AAPL ) are lower after technology blogs staked out California cancer treatment centers on the lookout for CEO Steve Jobs.

Citigroup ( C ) shares are higher after Bloomberg reported that the bank granted options on $18.2 million shares to 15 executives as a part of their 2010 pay. Among the executives receiving options are COO John Havens, head of consumer banking for the Americas Manuel Medina-Mora and CFO John Gerspach.

Shares of Coca-Cola Co. (KO) are higher after the soft drink maker said its board boosted the company's dividend by 7% to 47 cents a share from 44 cents. Shareholders of record on March 15 will be paid the dividend on April 1.

In other earnings news:

--Strayer Education (STRA) reports Q4 revs of $172 mln, about in line to just lower than the Street view of $173 mln on Thomson Reuters. EPS was $2.73, eight cents better than the analyst consensus.

--J.M. Smucker (SJM) reports adjusted Q3 EPS of $1.27 compared to $1.17 a year earlier and just topping the Thomson Reuters mean analyst estimate for $1.26. Sales for the quarter improved to $1.3 billion from the $1.2 billion recorded in the same period a year earlier. The Street looked for $1.25 billion.

--TRW (TRW) reports Q4 sales of $3.7 bln, ahead of the analyst consensus of $3.48 bln on Thomson Reuters. EPS was $1.72, vs. expectations of $1.24 per share.

--Build-A-Bear (BBW) reports Q4 revenue of $125.8 mln, up from $123.1 mln in the year ago quarter and about in line with the Street view. Earnings were $0.44 per share, including items, up sharply from a year ago loss of $0.05 per share, including items. The Street view was $0.26 per share, ex items.

--Duke Energy (DUK) reports adjusted Q4 EPS of $0.21 compared to $0.28 a year earlier and the Thomson Reuters mean analyst estimate for $0.23. Operating revenue of $3.4 billion is up from $3.1 billion a year earlier. The Street was at $3.15 billion.

--Barrick Gold (ABX) reported Q4 EPS of $0.95, up from $0.61 per share in the year ago quarter and better than the Street view of $0.84 per share.

Commodities are higher. April gold contracts are up $9, or 0.56%, to $1,384 an ounce, while March crude oil contacts are up 0.32%, or $0.27, at $85.27 a barrel.

In energy ETFs, the United States Oil Fund (USO) is up 0.34% to $35.65 and the United States Natural Gas fund (UNG) is down 1.48% to $5.22.

In precious metal ETFs, the SPDR Gold Trust (GLD) is up 0.63% to $134.94. Market Vectors Gold Miners (GDX) is up 0.78% to $58.19. iShares Silver Trust (SLV) is up 1.87% to $30.52.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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