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US stocks rebound on economic data

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US stocks rebound on economic data

US stocks snapped a three-day slump on the heels of stronger than forecasted data. Stocks traded mostly to the downside early in the week as market participants speculated about the future of the Federal Reserve’s bond buying program.

Investors were delighted to learn the US manufacturing industry soared to an eight-month high in November, erasing October’s one-year low. Fewer Americans applied for unemployment benefits last week, according to the Labor Department. Weekly jobless claims fell by 21,000 to 323,000, shifting the four-week moving average down to 338,500.

The Standard & Poor’s 500 rose more than 0.8 percent to 1,795.85, its biggest jump in nearly two weeks. The gains virtually wiped away the benchmark gauge’s three-day skid, bringing it closer to 1,800. The Dow Jones Industrial Average recorded a triple digit gain, soaring 109.17 points to 16,010.00, a record high. The Dow briefly touched 16,000 earlier in the week before succumbing to pressures. All but seven of the Dow’s 30 members reported gains, led by JPMorgan Chase & Co (NYSE:JPM) , American Express Co (NYSE:AXP) , and Intel Corporation (NASDAQ:INTC) , which advanced at least 2 percent.

“After three consecutive negative days it’s reasonable to expect a breather at least in the beginning of the day,” said Lawrence Creatura of Federal Investors Inc.

The major US indices are well poised to break multiyear highs. Stronger than forecasted corporate earnings and continued stimulus will likely keep the benchmark gauges well supported. Stocks have already won $172 billion since January 1, the largest run since 2000, according to investment research firm Morningstar Inc.

The US economy appears poised for a strong holiday season. Retail sales were seemingly unaffected by the 16-day government shutdown, rising 0.4 percent in October. American retailers generate as much as 40 percent of their total yearly revenues during November and December, according to the National Retail Federation.

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