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US STOCKS-Wall St rebounds as central banks' stimulus seen intact
May 30, 2013 / 5:46 PM / 5 years ago

US STOCKS-Wall St rebounds as central banks' stimulus seen intact

* Jobless claims unexpectedly rise in latest week

* Data reassures that Fed won’t scale back soon on stimulus

* EMC up on dividend, buyback

* Indexes up: Dow 0.51 pct, S&P 0.66 pct, Nasdaq 0.89 pct

By Chuck Mikolajczak

NEW YORK, May 30 (Reuters) - U.S. stocks bounced back on Thursday from declines in the prior session as weaker-than-expected economic data kept afloat the belief stimulus measures by central banks will likely continue.

First-time claims for unemployment benefits unexpectedly rose in the latest week while the government’s latest reading on first-quarter gross domestic product came in slightly below forecasts.

The softer-than-expected data helped quiet speculation that the Federal Reserve may begin to trim its stimulus measures sooner than had been expected.

“The mentality of late has been, buy the market on weak data because it is going to keep the Fed involved because they are going to pump in liquidity,” said Dan McMahon, director of equity trading at Raymond James in New York.

Stocks’ performance has been closely tied lately to perceptions about central bank policy. Shares tumbled on Wednesday as U.S. Treasury bond yields rose to the highest level in 13 months on concerns the Fed would curb its bond-buying because of signs the economy was strengthening.

Pending home sales rose 0.3 percent in April to the highest level since April 2010, but analysts were expecting a 1.1 percent rise.

On Tuesday, reassurances from central banks around the world that programs would remain intact had boosted equity prices.

One of the trademarks of the rally this year has been the ability of equities to quickly recover from any losses, with only five losing weeks in 2013.

“It is this buying on dips phenomenon,” said Tim Ghriskey chief investment officer of Solaris Group in Bedford Hills, New York. “It is literally cash that is sitting on the sidelines looking for pullbacks and we have had a bit of one here.”

The Dow Jones industrial average gained 77.65 points, or 0.51 percent, to 15,380.45. The Standard & Poor’s 500 Index gained 10.89 points, or 0.66 percent, to 1,659.25. The Nasdaq Composite Index gained 30.78 points, or 0.89 percent, to 3,498.29.

Loose monetary policies by central banks around the world have lifted stock markets, driving both the Dow and the S&P 500 to record highs this year. The S&P 500 is up more than 16 percent this year so far.

In company news, Costco Wholesale Corp reported third-quarter earnings that beat expectations by a penny, though sales were below forecasts. Shares edged up 0.4 percent to $113.41.

Semiconductors were higher after chipmaker Avago Technologies forecast current-quarter revenue largely above expectations. Avago shares jumped 10 percent to $37.89 while the PHLX semiconductor index climbed 1.8 percent.

NV Energy Inc surged 22.6 percent to $23.64 after a unit of Berkshire Hathaway Inc agreed to buy the electric utility for $5.6 billion. Berkshire class B shares rose 1.7 percent to $114.93.

Shares of EMC Corp, the data storage equipment makers, rose 5.2 percent to $24.90 after instituting a quarterly dividend and increasing its stock buyback program to $6 billion from $1 billion.

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