* Jobless claims fall more than expected; Q1 GDP revisedlower
* Dow up 0.4 pct; S&P 500 up 0.5 pct; Nasdaq up 0.5 pct (Updates to close)
By Chuck Mikolajczak
NEW YORK (Frankfurt: HX6.F - news) , May 29 (Reuters) - The S&P 500 index climbed toits third record closing high in four sessions on Thursday astraders shrugged off data that showed the economy shrank in thefirst quarter and bet on improvement in the second quarter.
New claims for unemployment benefits fell more than expectedlast week, pointing to a strengthening labor market and givinginvestors a reason to buy U.S. stocks. Data from the CommerceDepartment showed that gross domestic product contracted for thefirst time in three years in the first quarter, although signsindicated it has rebounded.
"The headline figure was weaker than expected, but it wasmainly due to slower inventory growth, which bodes well forfuture growth, future orders, new orders," said Jeffrey Saut,chief investment strategist at Raymond James Financial (NYSE: RJD - news) in St.Petersburg, Florida.
The S&P 500 gained 10.25 points or 0.54 percent, to1,920.03 - a record close and a lifetime intraday high.
Saut said that unless a decline materialized this week, theS&P 500 is "probably not going to come back below (the) 1,890 -1,900 (level), which is where the near-term support is."
The Dow Jones industrial average rose 65.56 points or0.39 percent, to 16,698.74. The Nasdaq Composite added22.87 points or 0.54 percent, to 4,247.95.
The U.S. 10-year Treasury note yield touched2.40 percent, its lowest level since last June, on expectationsof further policy easing by the European Central Bank next week.Low yields could keep pulling investors into dividend-payingstocks, with high-yielding utilities widelyoutperforming the S&P 500 so far this year.
"If we continue to stay weak for whatever reason, then thesebond proxies are going to keep doing great, the bond market willcontinue to defy skeptics, yields will continue to stay low, andthe indexes will stay at their highs - or close," said DougForeman, chief investment officer of Kayne Anderson RudnickInvestment Management in Los Angeles, California.
Hillshire Brands (Frankfurt: LEE1.F - news) surged 17.7 percent to $52.76 afterTyson Foods (NYSE: TSN - news) offered to top a bid from Pilgrim's Pride. Tyson shares rose 6.1 percent to $43.25. Pilgrim'sPride fell 1.1 percent to $25.09.
The Dow Jones Transportation Average scored anotherrecord closing high, rising 0.4 percent to 8,110.35.
Apple shares gained 1.8 percent to $635.38 afterhitting $636.87, its highest level in a year and a half, a dayafter the iPhone maker announced it will buy music streaming andaudio equipment company Beats for about $3 billion.
Volume was light, with about 4.88 billion shares traded onU.S. exchanges, well below the 5.78 billion average so far thismonth, according to data from BATS Global Markets.
Advancing stocks outnumbered declining ones on the New YorkStock Exchange by a ratio of 2 to 1, while on the Nasdaq, threestocks rose for every two that fell.
(Reporting by Chuck Mikolajczak; Editing by Nick Zieminski andJan Paschal)
- Stocks & Offerings
- Investment & Company Information