A winning day for Wall Street
After previous session's slide, stocks lifted by lower oil prices and Philly Fed reading; Treasury bond yields creep higher.
NEW YORK (CNNMoney.com) -- Rising Treasury yields failed to spook investors Thursday as stocks finished higher, helped by lower oil prices and a better-than-expected report from the manufacturing sector.
The tech-laden Nasdaq (up 17.00 to 2,616.96, Charts) finished up nearly 0.7 percent.
Stocks seesawed for most of the session Thursday, but a drop in the price of oil below $69 a barrel and a strong reading in the Philadelphia Federal Reserve Bank's manufacturing report helped lift stocks in early afternoon trading.
"The market is very rationally bouncing back and taking back a lot of yesterday's losses," Alec Young, equity strategist for Standard & Poor's.
The Philly Fed said manufacturing growth in the Mid-Atlantic region rose to 18 in June, versus a Briefing.com estimate for a reading of 8. Any reading above zero represents growth.
Oil prices eased Thursday, as U.S. light crude settled down August fell 21 cents to $68.65 a barrel in NYMEX trading.
In other economic news, The Conference Board reported its leading indicators index, a read on the future performance of the economy, rose 0.3 percent in May, about in line with estimates, after falling in April.
Weekly jobless claims jumped to their highest level in nearly two months as first-time unemployment claims rose to 324,000 for the week ended June 16, the Labor Department reported.
No economic reports are scheduled for Friday, but investors will be closely focused on the initial public offering of Blackstone Group, one the world's largest private equity firms.
The company announced late Thursday it had priced 133.3 million common units at $31 each, bringing its total offering to $4.75 billion, making it the largest U.S. IPO of the year.
Earlier in the day, two U.S. senators said the company's public offering raised "serious tax questions."
The private equity firm will begin trading under the symbol "BX."
Bonds and Bear Stearns
Worries about rising Treasury bond yields and the potential closure of two Bear Stearns hedge funds hit by big losses in securities backed by subprime mortgages, sent stocks down more than 1 percent in the previous session.
Merrill Lynch (Charts) seized about $800 million of assets from the two Bear Stearns (up $2.61 to $145.81, Charts, Fortune 500) hedge funds Wednesday, which prompted speculation that similar problems could erupt elsewhere. Other market observers believed the situation could lead to a tightening of credit and ultimately disrupt the bond market.
Investors had already been on edge about rising Treasury rates, as the yield on the benchmark 10-year note climbed to its highest level in five years last week.
Investors have worried that rising rates could further damage the already battered housing market and crimp consumer spending. On top of that, higher rates could slow corporate borrowing, which has fueled much of the recent merger activity that's helped lift stocks this year.
In Thursday's session, the yield on the benchmark 10-year note rose to 5.19 percent, from 5.14 percent the previous session. Bond prices and yields move in opposite directions.
Markets on the move
A day after Dow Jones (down $0.94 to $59.71, Charts) announced its board of directors is taking over negotiations for News Corp.'s (Charts, Fortune 500) $5 billion takeover offer, Financial Times publisher Pearson and General Electric (up $0.01 to $38.80, Charts, Fortune 500), the parent company of business news channel CNBC, said they would not pursue a bid for Dow Jones.
On the earnings front, home furnishing retailer Pier 1 (down $0.33 to $8.30, Charts) reported its quarterly losses more than doubled due to weak sales and said it planned to close more stores than initially expected. Shares sank over 4 percent in afternoon trade.
Shares of H&R Block (down $0.74 to $22.04, Charts, Fortune 500) fell 3 percent after the tax preparer reported lower profits in the fourth-quarter, falling short of Wall Street forecasts, blaming weakness in its mortgage unit.
American Greetings (up $1.86 to $26.99, Charts) doubled its profit in the most recent quarter, the greeting card company said Thursday, handily beating Wall Street estimates and sending its shares over 7 percent higher on the New York Stock Exchange.
In corporate news, Starbucks (down $1.06 to $26.26, Charts, Fortune 500) shares fell over 4 percent Thursday after its chief financial officer warned that the company's 2007 earnings forecast would be difficult, blaming such market conditions as higher dairy costs.
Shares of U.S. sunglasses maker Oakley (up $3.22 to $28.45, Charts) soared 12.5 percent after leading eyewear maker Luxottica Group (up $3.18 to $38.02, Charts) agreed to buy the company for $2.1 billion in cash.
Among individual issues, 24 of the 30 Dow components rose.
Market breadth was positive. On the New York Stock Exchange, losers beat winners 6 to 5 over on volume of 1.6 billion shares. On the Nasdaq, decliners edged out advancers on volume of 2.05 billion shares.