Closing Bell: Stocks Make Gains for 3rd Straight Day on Upbeat Economic Data

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Stocks continued to make gains Thursday, pushed higher by positive news about the nation's economy. Investors also reacted positively to assurances by two Federal Reserve officials who stressed that the Fed's bond purchase program won't slow until the economy strengthens further.

The Dow industrials (^DJI) rose 115 points, adding a third day to its streak of triple-digit gains, to close at 15,025. The S&P 500 (^GPSC) advanced nearly 10 points, to 1,613, and the Nasdaq (^IXIC) added almost 26 to end at 3,402.

The number of Americans filing new claims for unemployment benefits dropped last week by 9,000 to a seasonally adjusted 346,000, in line with the recent moderate pace of job growth, according to the Labor Department.

Consumers picked up the pace of their spending last month. The Commerce Department reported consumer spending rose 0.3 percent in May, the fastest rate in three months. Incomes also rose, by 0.5 percent, for their biggest gain since February.

Sales of existing homes jumped nearly 7 percent in May as homebuyers moved to lock in low mortgage rates. The National Association of Realtors said the number of signed contracts jumped last month to its highest level since December 2006.

Mortgage-buyer Freddie Mac reported that the average rate for a 30-year fixed mortgage surged this week to 4.46 percent, the highest in two years. Though mortgage rates remain low by historical standards, the recent rise in rates has had an impact on buyers' wallets. A homebuyer who locked in a 3.35 percent rate in early May on a $200,000 mortgage pays $881 a month, according to Another buyer who gets a 4.46 percent rate this week on a mortgage of the same amount will pay $1,008 a month.

Stocks in the news Thursday:
  • Winnebago Industries (WGO) rose fractionally after reporting net income nearly doubled in the third quarter on strong sales of its RVs. For the period ending June 1, Winnebago earned 27 cents a share, compared 13 cents a share a year ago.
  • The fallout continues from Paula Deen's admission that she once used racial slurs. Target (TGT) is cutting ties with the celebrity cook. Meanwhile, diabetes-drug maker Novo Nordisk (NVO) said that it and Deen have "mutually agreed to suspend our patient education activities for now." On Wednesday, Walmart Stores (WMT) announced it was severing ties with the Food Network host.
  • In IPO news, shares of CDW Corp. (CDW) rose 8 percent in the information-technology company's first day of trading on Nasdaq.
  • U.S. regulators have charged MF Global, along with former Chief Executive Jon Corzine and former Assistant Treasurer Edith O'Brien, for the failed futures brokerage's misuse of customer funds and related violations.
  • ConAgra Foods (CAG) reported a quarterly profit, reversing a year-ago loss, helped by its acquisition of Ralcorp Holdings. In its fiscal fourth quarter, the maker of Chef Boyardee pasta said it earned 45 cents a share, compared to a net loss of 21 cents a share last year. Shares rose more than 5 percent to $35.06.
Compiled from staff and wire reports.

9 Numbers That'll Tell You How the Economy's Really Doing
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Closing Bell: Stocks Make Gains for 3rd Straight Day on Upbeat Economic Data
The gross domestic product measures the level of economic activity within a country. To figure the number, the Bureau of Economic Analysis combines the total consumption of goods and services by private individuals and businesses; the total investment in capital for producing goods and services; the total amount spent and consumed by federal, state, and local government entities; and total net exports. It's important, because it serves as the primary gauge of whether the economy is growing or not. Most economists define a recession as two or more consecutive quarters of shrinking GDP.
The CPI measures current price levels for the goods and services that Americans buy. The Bureau of Labor Statistics collects price data on a basket of different items, ranging from necessities like food, clothing and housing to more discretionary expenses like eating out and entertainment. The resulting figure is then compared to those of previous months to determine the inflation rate, which is used in a variety of ways, including cost-of-living increases for Social Security and other government benefits.
The unemployment rate measures the percentage of workers within the total labor force who don't have a job, but who have looked for work in the past four weeks, and who are available to work. Those temporarily laid off from their jobs are also included as unemployed. Yet as critical as the figure is as a measure of how many people are out of work and therefore suffering financial hardship from a lack of a paycheck, one key item to note about the unemployment rate is that the number does not reflect workers who have stopped looking for work entirely. It's therefore important to look beyond the headline numbers to see whether the overall workforce is growing or shrinking.
The trade deficit measures the difference between the value of a nation's imported and exported goods. When exports exceed imports, a country runs a trade surplus. But in the U.S., imports have exceeded exports consistently for decades. The figure is important as a measure of U.S. competitiveness in the global market, as well as the nation's dependence on foreign countries.
Each month, the Bureau of Economic Analysis measures changes in the total amount of income that the U.S. population earns, as well as the total amount they spend on goods and services. But there's a reason we've combined them on one slide: In addition to being useful statistics separately for gauging Americans' earning power and spending activity, looking at those numbers in combination gives you a sense of how much people are saving for their future.
Consumers play a vital role in powering the overall economy, and so measures of how confident they are about the economy's prospects are important in predicting its future health. The Conference Board does a survey asking consumers to give their assessment of both current and future economic conditions, with questions about business and employment conditions as well as expected future family income.
The health of the housing market is closely tied to the overall direction of the broader economy. The S&P/Case-Shiller Home Price Index, named for economists Karl Case and Robert Shiller, provides a way to measure home prices, allowing comparisons not just across time but also among different markets in cities and regions of the nation. The number is important not just to home builders and home buyers, but to the millions of people with jobs related to housing and construction.
Most economic data provides a backward-looking view of what has already happened to the economy. But the Conference Board's Leading Economic Index attempts to gauge the future. To do so, the index looks at data on employment, manufacturing, home construction, consumer sentiment, and the stock and bond markets to put together a complete picture of expected economic conditions ahead.
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