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

DailyFinance Staff
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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 Bankrate.com. 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.

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