US STOCKS-Wall St climbs to record after data; Jackson Hole ahead

Thu Aug 21, 2014 12:27pm EDT

* Initial claims drop 14,000 from prior week

* Existing home sales hit 10-month high

* Family Dollar rejects Dollar General buyout offer

* Jackson Hole conference to begin

* Indexes: Dow up 0.41 pct, S&P up 0.22 pct, Nasdaq off 0.08 pct (Updates to midday)

By Chuck Mikolajczak

NEW YORK, Aug 21 (Reuters) - U.S. stocks inched higher on Thursday and the S&P reached a record high, lifted by data pointing to steady improvement in the economy, as investors awaited the start of a meeting of top central bankers and economists in Jackson Hole, Wyoming.

Policymakers are due to discuss the labor markets of major economies at the Aug. 21-23 meeting, with U.S. Federal Reserve Chair Janet Yellen scheduled to speak Friday. Investors will peruse officials' remarks for clues on the timing of an interest rate hike.

A flurry of U.S. economic data, including a rise in home resales to a 10-month high and a decline in initial jobless claims, pointed to an economy that continues to slowly gain strength.

"It seems that conditions reflect the best of all worlds - U.S. economic growth that is neither too slow, which would put pressure on earnings - nor too fast, implying inflationary pressures which could lead to (price-to-earnings ratio) contraction and possibly accelerate the Fed's move towards higher interest rates," said Terry Sandven, chief equity strategist at U.S. Bank Wealth Management in Minneapolis.

The Dow Jones industrial average rose 69.56 points or 0.41 percent, to 17,048.69, the S&P 500 gained 4.34 points or 0.22 percent, to 1,990.85 and the Nasdaq Composite dropped 3.65 points or 0.08 percent, to 4,522.83.

Technology shares advanced, with Hewlett-Packard gaining 4.7 percent to $36.76 after posting a surprise increase in quarterly revenue. Ebay shares jumped 4.7 percent to $55.91 on a report the company was mulling spinning off its PayPal unit as soon as next year. The S&P technology index added 0.4 percent.

Family Dollar Stores Inc rejected Dollar General Corp's $8.95 billion acquisition offer, citing antitrust concerns, and reaffirmed its support for a buyout offer from Dollar Tree Inc.

Family Dollar shares shed 0.3 percent to $79.55 and Dollar General dipped 0.3 percent to $63.54. Dollar Tree also reported quarterly results and fell 1.1 percent to $54.41.

Sears Holdings tumbled 7.7 percent to $33.19, putting it on track for its biggest percentage drop since January, after the owner of Sears department stores and the Kmart discount chain reported a ninth straight quarterly loss and said it might close more stores than planned this year.

(Editing by Bernadette Baum and Nick Zieminski)

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