Stocks got off to a good start Thursday and held on to their gains, carving out a modest increase for the second day in a row.
Amid a relatively slow week of trading, thin on major economic news and leading into the Memorial Day weekend, investors drew encouragement from a mixed bag of economic and housing data. Improving earnings from Dollar Tree, Best Buy and other retailers also helped lift the market.
The Standard & Poor's 500 index gained 4.46 points, or 0.2 percent, to close at 1,892.49. The index is up 2.4 percent for the year.
The Dow Jones industrial average rose 10.02 points, or 0.1 percent, to end at 16,543.08. The Nasdaq composite index added 22.80 points, or 0.6 percent, to finish at 4,154.34.
The Dow and Nasdaq remain down slightly for 2014.
Small-company stocks also extended their rally to a second day, pushing the Russell 2000 index up 10.24 points, or 0.9 percent, to 1,113.87.
Major indexes were already pointing to a slight uptick ahead of the start of regular trading after a survey from HSBC suggested the slowdown in China's economy is flattening. May's reading on China's manufacturing sector was the best in five months.
After the market opened, investors received more encouraging news. The Conference Board said its index of leading economic indicators posted a solid gain for the month. That provided more evidence that U.S. growth strengthened in April after a severe winter slowed businesses down.
"A revival in China is good for emerging markets, good for global growth and therefore good for stocks, and not so hot for bonds," noted Krishna Memani, chief investment officer at Oppenheimer Funds.
Bond prices fell slightly. The yield on the 10-year Treasury note edged up to 2.55 percent from 2.54 percent late Wednesday.
A U.S. government report showing a rise in the number of people seeking unemployment benefits last week didn't dampen the market's upward trend. Nor did the latest sales data for previously occupied U.S. homes, which were up modestly on a monthly basis in April, but down from a year ago, according to the National Association of Realtors.
Major indexes have finished slightly higher in four of the past five trading days. The gains have nudged the S&P 500 index, which hit a high early last week, up 0.8 percent for this week.
Among the biggest variables influencing the markets this year have been uncertainty over when U.S. growth will accelerate and concern that growth in China is slowing.
The latest batch of economic and earnings data suggests that the global economy is recovering, albeit slowly.
"I do expect us to see a continued recovery, but it's not going to be dramatic and therefore I don't look for any big dramatic moves in the market either," said Chris Gaffney, a senior market strategist at EverBank Wealth Management.
Eight of the 10 industry sectors in the S&P 500 rose Thursday, led by utilities. Consumer staples and energy stocks lagged.
Best Buy added 87 cents, or 3.4 percent, to $26.22 after its earnings came in well ahead of what investors were looking for, while L Brands, which owns store brands such as Bath and Body Works and Victoria's Secret, rose 83 cents, or 1.5 percent, to $56.69.
Business on 05/23/2014