US STOCKS-Banks lead Wall Street higher, supported by economic data
* Jobless claims, inflation data support stocks
* Target cuts full-year profit forecast
* Indexes up: Dow 0.6 pct, S&P 0.7 pct, Nasdaq 1.1 pct
NEW YORK, Nov 21 (Reuters) - U.S. stocks rose on Thursday, rebounding from three days of weakness, after economic data pointed to a slowly improving labor market and subdued inflation.
Financial shares led the market higher as the S&P 500 once again closed in on the 1,800 milestone it reached earlier this week. Investors remain unsure about the timing for the Federal Reserve to reduce its $85 billion-per-month in bond buying that has lowered rates, but some say the market will weather the eventual pullback of that stimulus.
"I think the stock market will be on a rising track for the rest of the year," Margie Patel, senior portfolio manager at Wells Capital Management, at the Reuters Global Investment Summit on Thursday.
"Everyone would like to see a correction" so they can add to positions, she said, adding that equities will be the strongest asset class in 2014, as well.
The central bank has repeated it will not withdraw support until the economy can stand on its own and interest rates will remain low well after stimulus is cut back.
A combination of a growing economy and continued stimulus give investors a good reason to buy stocks, Steven Einhorn, vice chairman of Omega Advisors, told the Summit.
There is also "a whole host of things the Fed can do to mitigate and moderate the sting" of the stimulus reduction, Einhorn said. Such measures include additional forward guidance for markets, which the members of the Fed's policy setting committee discussed during their most recent meeting, minutes released on Wednesday showed.
Expectations that the Fed could start cutting stimulus - but without interest-rate increases as well - has helped to widen the spread between long- and short-debt debt. That benefits banks, which make money borrowing at short rates and lending at longer rates. Bank of America Inc shares rose 2.6 percent to $15.53 a share.
The Dow Jones industrial average rose 92.15 points or 0.58 percent, to 15,992.97, the S&P 500 gained 13.27 points or 0.74 percent, to 1,794.64 and the Nasdaq Composite added 42.598 points or 1.09 percent, to 3,963.868.
The number of Americans filing new claims for unemployment benefits fell more than expected last week, while producer prices fell for a second straight month in October, indicating inflation pressures remain muted.
"The (new claims) number we got this morning is very, very robust ... We've been handed a few one-two punches - the government shutdown, the payroll tax increase - but guess what, like Elton John, the economy is still standing," said Anthony Chan, chief economist at Chase Private Client.
Target shares fell 3.2 percent to $64.35 after comparable sales rose less than expected in the third quarter and it lowered its full-year profit forecast.
But the Morgan Stanley retail index rose 0.6 percent, boosted by a 7.5 percent climb in Williams-Sonoma Inc to $59.69. The home products retailer reported quarterly results above estimates and said it was well-positioned for the holiday season.