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US STOCKS-Wall Street bounces back after strong data
August 22, 2013 / 2:18 PM / 4 years ago

US STOCKS-Wall Street bounces back after strong data

* World economy shows evidence of rebound

* Abercrombie & Fitch shares tumble after results

* Indexes up: Dow 0.2 pct, S&P 0.5 pct, Nasdaq 0.8 pct

By Rodrigo Campos

NEW YORK, Aug 22 (Reuters) - U.S. stocks rose on Thursday, with the Dow industrials up for the first time in seven sessions after upbeat data from the world’s top economies more than offset lingering uncertainty over the Federal Reserve’s asset purchases stimulus program.

Investors were encouraged by business surveys that showed U.S. manufacturing activity hit a five-month high in August, growth in the euro zone was better-than-expected and China’s manufacturing sector rebounded, providing evidence that the world economy is on the mend.

Bets on a stronger economy helped lift shares of cyclical sectors like energy, basic materials and industrials, with financial shares also up in the S&P 500.

“The way the U.S. recovery is going, to have an improving Europe and China is certainly going to help the global picture,” said Art Hogan, managing director at Lazard Capital Markets in New York.

Other U.S. data showed the number of Americans filing new claims for unemployment benefits rose last week but held close to a six-year low and gave a positive signal for hiring during the month.

The Dow Jones industrial average rose 25.61 points or 0.17 percent, to 14,923.16, the S&P 500 gained 8.46 points or 0.51 percent, to 1,651.26 and the Nasdaq Composite added 27.978 points or 0.78 percent, to 3,627.768.

The Dow industrials fell Wednesday for a sixth straight day and the S&P 500 closed below its 50-day moving average for a fourth session after minutes from the Fed’s July meeting gave few clues about when, and by how much, the U.S. central bank will start reducing its $85 billion a month in bond purchases.

Shares of Hewlett-Packard dropped 11.7 percent to $22.42, a day after the company reported a decline in Enterprise Group revenue, the company’s second-largest division and a critical component of Chief Executive Meg Whitman’s plan to transform the company.

Abercrombie & Fitch shares tumbled 19.3 percent to $37.79 after the apparel retailer said quarterly comparable sales fell a larger-than-expected 10 percent.

Sears Holdings, which operates Sears department stores and the Kmart discount chain, reported a much bigger-than-expected quarterly loss and its shares fell 8.6 percent to $39.56.

GameStop shares were up 14.2 percent at a more than five-year high of $54.36 after the world’s largest retailer of video game products posted results that topped Wall Street estimates.

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