* Jobless claims fall more than expected, Q1 GDP revised
* Apple to buy Beats for $3 bln, producer Iovine joins
* Hillshire jumps, Tyson's bid outshines Pilgrim's Pride's
* Indexes up: Dow 0.1 pct, S&P 500 0.2 pct, Nasdaq 0.3 pct
By Rodrigo Campos
NEW YORK, May 29 U.S. stocks rose on Thursday
and the benchmark S&P 500 index scaled new peaks as traders bet
on strong growth in the second quarter even as data showed the
world's largest economy contracted in the first quarter.
The gains were supported by a report showing the number of
Americans filing new claims for unemployment benefits fell more
than expected last week, pointing to a strengthening labor
market. Separately, the Commerce Department slashed its estimate
of gross domestic product to show the economy shrank at a 1.0
percent annual rate.
"Personal consumption was actually revised up, it was a big
number and it held," said Phil Orlando, chief equity market
strategist at Federated Investors in New York, referring to
details in the gross domestic product data released earlier in
"This gives me greater confidence that we're looking at 3
handles on GDP for the rest of the year."
Citi analysts said the U.S. economy could grow nearly 4
percent in the second quarter while Goldman Sachs upped its
estimate to 3.9 percent.
The Dow Jones industrial average rose 16.31 points,
or 0.1 percent, to 16,649.49, the S&P 500 gained 3.77
points, or 0.2 percent, to 1,913.55 and the Nasdaq Composite
added 11.80 points, or 0.28 percent, to 4,236.87.
The U.S. 10-year note yield brushed against 2.40
percent to hit its lowest since last June, on expectations of
further policy easing by the European Central Bank next week.
Low yields could continue to entice investors into
dividend-paying stocks, with the high-yielding utilities sector
widely outperforming the S&P 500 benchmark so far this year.
"Lower yields have nothing to do with the domestic economy
but the anticipation of the ECB pulling the trigger next week,"
said Peter Cardillo, chief market economist at Rockwell Global
Capital in New York.
He said bonds were also a "safety bet after the European
elections, as the periphery voted against austerity, so the fear
might be that eventually those economies could get themselves
into more trouble."
Hillshire Brands shares soared 16.3 percent to
$52.12 after Tyson Foods offered to top a bid from
Pilgrim's Pride. Tyson shares rose 7.3 percent to $43.74
and Pilgrim's Pride fell 1.7 percent to $24.94.
Shares of cyber security software maker Palo Alto Networks
jumped 8.7 percent to $75.58 a day after it reported
better-than-expected quarterly revenue as it added more
customers, and said it settled patent litigation with network
gear maker Juniper Networks.
Apple shares rose 0.9 percent to $629.70 after
hitting its highest in a year and a half, a day after announcing
it will buy music streaming and audio equipment company Beats
for about $3 billion and bring its founders, producer Jimmy
Iovine and rapper Dr. Dre, into Apple's ranks.
Abercrombie & Fitch shares jumped 4.6 percent to
$36.73 after sales fell less than expected.
(Editing by Nick Zieminski and Bernadette Baum)