* Initial claims drop 14,000 from previous week
* Existing home sales hit 10-month high
* Family Dollar rejects Dollar General's buyout offer
* Jackson Hole conference of central bankers to begin
* Dow up 0.5 pct; S&P 500 up 0.4 pct; Nasdaq up 0.1 pct
(Updates to afternoon)
By Akane Otani
NEW YORK, Aug 21 U.S. stocks rose on Thursday
after a flurry of economic data showed an improving economy and
as investors awaited the start of a central bankers' meeting in
Jackson Hole, Wyoming.
The S&P 500 climbed above its previous intraday record of
1,991.39, set on July 24, in Thursday morning trading. Investors
are eyeing the benchmark index's approach to 2,000, a
significant level it has yet to breach.
Market participants also refrained from making big bets on
Thursday ahead of the start later today of the policymakers'
meeting in Jackson Hole, which could provide clues on the timing
of an interest-rate hike. U.S. Federal Reserve Chair Janet
Yellen is scheduled to speak at the Jackson Hole conference on
"Overall, with the S&P reaching a new high and the Dow back
above 17,000, you're seeing a bullish tone in the market," said
Lawrence Glazer, managing partner at Mayflower Advisors in
"But the real question will be, with the bullish economic
data, will Yellen's comment in Jackson Hole remain as dovish as
the market hopes it will be?"
U.S. economic data, including a jump in existing home sales
to a 10-month high and a sharp drop in initial jobless claims,
pointed to an economy that is slowly gaining strength.
The Dow Jones industrial average rose 91.39 points,
or 0.54 percent, to 17,070.52. The S&P 500 gained 7.3
points, or 0.37 percent, to 1,993.81. The Nasdaq Composite
added 6.30 points, or 0.14 percent, to 4,532.78.
The S&P 500 kept extending its record intraday high,
touching 1,994.14 in late afternoon trading.
Bank of America Corp shares shot up 3.8 percent to
$16.11 after the company reached a record $16.65 billion
settlement with the U.S. government to settle charges that the
bank and companies it bought had misled investors into buying
troubled mortgage-backed securities. The stock's
rally helped lift the S&P 500 financial sector index to
its highest level since June 2008.
Technology shares advanced, with Hewlett-Packard
gaining 6.2 percent to $37.30 a day after the computing company
posted a surprising increase in quarterly revenue. Shares of
eBay jumped 4.9 percent to $56.02 on a report that the
company was mulling a spinoff of its PayPal unit as soon as next
year. The S&P technology index added 0.6 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 slipped 0.3 percent to $79.55 and
Dollar General dipped 0.3 percent to $63.60. Dollar Tree also
reported quarterly results; its stock fell 1.1 percent to
Sears Holdings tumbled 7.7 percent to $33.18,
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.
Sears also said it might close more stores than planned this
(Editing by Bernadette Baum, Nick Zieminski and Jan Paschal)