(Corrects to show S&P up 0.25 pct this week, not 2 percent, in
* DJ Transportation Average hits intraday record high
* S&P 500 on track to post 4th straight month of gains
* J.C. Penney, Groupon both sink on weak revenue
* Dow up 0.4 pct, S&P up 0.5 pct, Nasdaq up 0.6 pct
By Rodrigo Campos
NEW YORK, Feb 28 U.S. stocks rose modestly on
low volume on Thursday after strong economic data, but the
proximity of record highs for the Dow and the S&P 500 gave
investors a reason to keep gains in check.
The U.S. economy grew slightly in the fourth quarter,
reversing an earlier estimate showing contraction, and a drop in
new claims for unemployment benefits last week added to a string
of data that suggests the economy improved early this year.
Still, an even higher revision to GDP data was expected, and
the jobless claims extended a trend baked into stock prices.
The low volume shows a lack of conviction from new buyers,
according to Ken Polcari, director of the NYSE floor division at
O'Neil Securities in New York.
Polcari the recent gains are the reaction to Monday's
selloff, but there are not enough catalysts to take indexes much
"Don't expect the market to hit new highs today," he said.
In afternoon trading, just over 3 billion shares had changed
hands on the New York Stock Exchange, the Nasdaq and NYSE MKT.
The Dow was within striking distance of its record high
after a year-to-date advance of almost 8 percent. The Dow Jones
Transportation Average, seen as a bet on future growth,
is up 13 percent this year, and the 20-stock index hit a record
intraday high earlier on Thursday.
The Dow Jones industrial average rose 61.32 points or
0.44 percent to 14,136.69. The S&P 500 gained 8.03 points
or 0.53 percent to 1,524.02. The Nasdaq Composite added
17.14 points or 0.55 percent, to 3,179.67.
The Dow's record closing high, set on Oct. 9, 2007, stands
at 14,164.53, while the Dow's intraday record high, set on Oct.
11, 2007, stands at 14,198.10.
The S&P 500 is up 0.25 percent this week and is on track to
post its fourth straight month of gains.
Equity markets suffered steep losses earlier in the week on
concerns about the impact of an Italian election on the European
economy, but stocks bounced back on strong data and recent
comments by Federal Reserve Chairman Ben Bernanke that showed
continued support for the Fed's economic stimulus policy.
Gains in Limited Brands and Netflix, both
up nearly 4 percent, led the way among consumer stocks. Shares
of Limited Brands, the parent of retailers Victoria's Secret and
Bath & Body Works, shot up 3.8 percent to $46.21. The stock of
video streaming service Netflix jumped 3.8 percent to $191.24.
In contrast, shares of J.C. Penney, however, slid
14.9 percent to $18.01 after the department store operator
reported a steep drop in sales on Wednesday. Groupon Inc
also fell on weak revenue, with the daily deals
company's stock off 19.2 percent at $4.83.
Cablevision shares tumbled 8.8 percent to $14.11
after the cable provider took a $100 million hit on costs
related to Superstorm Sandy and posted deeper video customer
losses than expected.
On a positive note, Mylan Inc shares were on track
to close at their highest ever after the generic drugmaker
posted a 25 percent rise in fourth-quarter profit and said it
will buy a unit of India's Strides Arcolab Ltd. Mylan's stock
gained 4.2 percent to $29.78.
Investors were keeping an eye on the debate in Washington
over U.S. government budget cuts that will take effect starting
Friday if lawmakers fail to reach agreement on spending and
taxes. President Barack Obama and Republican congressional
leaders arranged last-ditch talks to prevent the cuts, but
expectations were low that any deal would emerge.
With 93 percent of the S&P 500 companies having reported
results so far, 69.5 percent have beaten profit expectations,
compared with a 62 percent average since 1994 and 65 percent
over the past four quarters, according to Thomson Reuters data.
Fourth-quarter earnings for S&P 500 companies are estimated
to have risen 6.2 percent, according to the data, above a 1.9
percent forecast at the start of the earnings season.
(Reporting by Rodrigo Campos; Additional reporting by Ryan
Vlastelica; Editing by Nick Zieminski and Jan Paschal)