* Initial claims rise, but still near 7-year low
* Existing home sales up, shy of expectations
* Best Buy rises after results
* Indexes up: Dow 0.13 pct, S&P 0.37 pct, Nasdaq 0.68 pct
(Adds existing home sales, comments, updates trading to midday)
By Chuck Mikolajczak
NEW YORK, May 22 U.S. stocks advanced modestly
on Thursday after the latest batch of mixed data failed to
deliver the confidence boost needed by investors to push indexes
past record highs set last week.
The number of Americans filing new claims for unemployment
benefits rose in the week ended May 17 and were above
expectations but remained near 7-year lows, pointing to labor
market conditions that continued to strengthen. U.S. home
resales rose in April and the supply of properties on the market
hit its highest since August 2012, hopeful signs for the stalled
housing market recovery.
The S&P 500 is less than 0.5 percent shy of its record
intraday high set on May 13, but has been caught between the
high and its 50-day moving average for the past week as data
left investors unsure about the pace of the economic recovery.
"We have been in a 'two steps forward, one step back'
progression on the domestic economy and that can be extended to
the global economy as well," said Jim Russell, senior investment
strategist at U.S. Bank Wealth Management in Cincinnati.
"We would characterize the rebound out of the
weather-inhibited first quarter as a bit disappointing. We were
looking for perhaps a bit more growth by mid-to-late May than
what we are seeing."
The Dow Jones industrial average rose 22.25 points,
or 0.13 percent, to 16,555.31, the S&P 500 gained 7
points, or 0.37 percent, to 1,895.03 and the Nasdaq Composite
added 28 points, or 0.68 percent, to 4,159.54.
Best Buy Co rose 1.2 percent to $25.65. The
electronics retailer reported first-quarter earnings that topped
expectations and domestic comparable store sales that fell more
Sears Holdings Corp posted a bigger loss for the
first quarter as the struggling retailer failed to arrest a fall
in sales despite heavy discounts. Shares slipped 2.7 percent to
Dollar Tree jumped 7.6 percent to $53.79, the best
performer on the S&P 500, after posting first-quarter results
and providing an outlook for the second quarter and full year.
Financial data firm Markit said its preliminary or "flash"
U.S. Manufacturing Purchasing Mangers Index rose to 56.2 in May,
stronger than an expected reading of 55.5. Factory output growth
hit its fastest pace since February 2011.
Reynolds American Inc is in active discussions to
buy Lorillard Inc in a complicated, three-way transaction
that could see British American Tobacco PLC take a
major role to back a potential merger, according to people
familiar with the matter. Lorillard slumped 3.9 percent to
$60.19 while Reynolds American shares dipped 1.7 percent to
(Editing by Bernadette Baum and Nick Zieminski)