The Commerce Department said sales of new homes rose 4.8 percent in September from August's levels, a pleaant surprise for a market that had a decline. The data was particularly reassuring after a drop in existing home sales sent stocks tumbling early in the previous session.The department's report earlier in the morning on orders of big-ticket items was less upbeat. Durable goods orders fell 1.7 percent in September, worse than the uptick economists had anticipated after August's significant 5.3 percent drop. Meanwhile, the Labor Department said claims for unemployment dipped last week by a smaller number than economists predicted.
From the market's perspective, the bright side to the weaker reports is that they could compel the Federal Reserve to lower interest rates again to boost spending. The central bank, which reduced rates last month by a half-percentage-point, is scheduled to meet next week to decide on monetary policy.
And meanwhile, most corporate earnings showed respectable growth Thursday. Motorola Inc. managed in the third quarter to post its first quarterly profit this year. The cell phone maker's earnings expectations for the fourth quarter were higher than forecasts, and shares rose 74 cents, or 4 percent, to $19.29.
In mid-morning trading, the Dow Jones industrial average rose 30.81, or 0.23 percent, to 13,706.06, recovering from an earlier loss.
Broader stock indicators also turned higher. The Standard & Poor's 500 index rose 3.77, or 0.25 percent, to 1,519.65, while the Nasdaq composite index rose 4.58, or 0.17 percent, to 2,779.34.
Bonds fell after the positive home sales report. The yield on the benchmark 10-year Treasury note rose to 4.36 percent from 4.35 percent late Wednesday.
In other earnings news, Aetna Inc. on Thursday boosted profit forecasts after posting a 4 percent rise in third-quarter earnings. The health insurer cost cuts and saw medical membership increase. Aetna rose $1.80, or 3.4 percent, to $54.70.
The dollar fell against most other major currencies, except the yen, while gold prices rose.
Crude oil futures for December delivery rose $1.32 to $88.42 a barrel on the New York Mercantile Exchange.
The Russell 2000 index of smaller companies was up 0.30, or 0.04 percent, at 811.15.
Advancing issues outnumbered decliners by about 5 to 4 on the New York Stock Exchange, where volume came to 249.1 million shares.
Stock markets overseas were mostly higher.
In Asian trading, Japan's Nikkei stock average fell 0.45 percent, but Hong Kong's Hang Seng index rose 0.78 percent. In European trading, Britain's FTSE 100 rose 1.33 percent, Germany's DAX index rose 1.00 percent, and France's CAC-40 rose 1.16 percent.
New York Stock Exchange: http://www.nyse.com
Nasdaq Stock Market: http://www.nasdaq.com
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