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US STOCKS-Wall St rises on optimism Fed stimulus policy safe
May 30, 2013 / 7:33 PM / 5 years ago

US STOCKS-Wall St rises on optimism Fed stimulus policy safe

* Jobless claims unexpectedly rise in latest week

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

* Indexes up: Dow 0.6 pct, S&P 0.8 pct, Nasdaq 1 pct

By Angela Moon

NEW YORK, May 30 (Reuters) - U.S. stocks rebounded on Thursday on tepid economic data that eased concerns the U.S. Federal Reserve would begin to gradually decrease its policies to stimulate growth.

The Dow industrials erased almost all of the previous session’s losses, the average’s biggest decline in three weeks.

Stocks have been volatile and closely tied to changing views of the fate of central bank policy. Shares tumbled on Wednesday on concerns the Fed would curb its bond-buying because of signs the economy was strengthening.

At the same time, U.S. Treasury bond yields rose to the highest level in 13 months.

“It won’t be until around September before we really hear about possible changes in Fed (policy), but the market is volatile because at these levels, profit-taking is part of a hedging method to protect against possible downsides,” said Randy Frederick, director of trading and derivatives at Charles Schwab in Austin, Texas.

“After the profit-taking, the market moves right back up because it’s a great buying opportunity, like today.”

The Dow Jones industrial average was up 90.48 points, or 0.59 percent, at 15,393.28. The Standard & Poor’s 500 Index was up 12.92 points, or 0.78 percent, at 1,661.28. The Nasdaq Composite Index was up 35.42 points, or 1.02 percent, at 3,502.94.

Data showed 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.

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

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

In company news, Costco Wholesale Corp, the largest U.S. warehouse club chain, reported third-quarter earnings that beat expectations by a penny, though sales were below forecasts. Shares edged up 0.1 percent to $112.84.

Semiconductors were higher after chipmaker Avago Technologies forecast current-quarter revenue largely above expectations. Avago shares jumped 10 percent to $37.90 while the PHLX semiconductor index climbed 1.9 percent.

NV Energy Inc surged 22.3 percent to $23.58 after a unit of Berkshire Hathaway Inc agreed to buy the electric utility for $5.6 billion. Berkshire class B shares rose 1.5 percent to $114.74.

Shares of EMC Corp, the data storage equipment makers, rose 5 percent to $24.86 after instituting a quarterly dividend and increasing its stock buyback program to $6 billion from $1 billion.

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