U.S. stocks on Thursday rose modestly after a tentative start, following data from government of a raised estimate of first-quarter economic growth and a modest rise in weekly jobless claims.
In line with expectations, the Commerce Department revised its reading of first-quarter gross domestic product to an annual rate of 0.9%, above its previous estimate of 0.6%.
"As long as the number holds above 0.5% we are still skirting (with) the term 'recession.' Stronger would obviously be better," said Marc Pado, U.S. market strategist at Cantor Fitzgerald, who cited better inventory numbers and improved exports for the upward revision.
In a separate report, the Labor Department said unemployment claims rose 4,000 to 372,000, a bit more than forecast. .
The Dow Jones Industrial Average (DJI) gained 3.42 points to 12,597.45, with 18 of its 30 components posting gains, led by Citigroup Inc. (NYSE:C) (C), up 1.9%.
Alcoa Inc. (NYSE:AA) (AA) and Intel Corp. (NASDAQ-NMS:INTC) (INTC) fronted the early declines, both off nearly 2%.
The S&P 500 (SPX) was up 3.19 of a point at 1,394.03.
Financial shares led sector gains on the S&P, up 1%, followed by health care and telecommunications, both up 0.5%.
Materials, energy and industrials composed the falling industry groups on the S&P, with all three sliding less than 1%.
The Nasdaq Composite (RIXF) edged 8.58 points higher to 2,495.28.
Oil futures also saw volatile action, briefly jumping higher after the Energy Department reported supplies of crude fell by 8.8 million barrels to 311.6 million last week. More recently, crude oil futures slipped 31 cents to $130.72 a barrel.
Retail reports were mixed: Sears Holdings (NASDAQ-NMS:SHLD) (SHLD) shares dropped 3% after reporting a surprise loss, while shares of Costco Wholesale Corp. (NASDAQ-NMS:COST) (COST) edged higher after the warehouse retailer reported stronger-than-expected results.
On the deal-making front, Bristol-Myers Squibb Co. (NYSE:BMY) (BMY) said it would buy Kosan Biosciences Inc. (NASDAQ-NMS:KOSN) (KOSN) in a transaction valued at about $190 million.
In other M&A activity, Trump Entertainment Resorts Inc. (NASDAQ-NMS:TRMP) (DJTE) said it would sell Trump Marina Hotel Casino in Atlantic City to Coastal Marina LLC for $316 million.
(END) Dow Jones Newswires 05-29-08 1055 Copyright (c) 2008 Dow Jones & Company, Inc.
