In the day's economic news, initial claims for unemployment fell 20,000 to 368,000 last week, the lowest level since May 2008, the Labor Department reported. The fact that claims have been below 400,000 for the second week is considered a signal that job growth isn't far behind.
The upbeat claims number has, in fact, raised expectations that the government's jobs report released Friday will show strong gains. Economists expect the Labor Department will report a 185,000 gain in nonfarm payrolls, and a 190,000 gain in private-sector jobs when the data is released Friday, according to Reuters. Some economists, have revised their estimates upward in light of the claims number, and news that the private sector added 217,000 jobslast month, according to ADP Employer Services and Macroeconomic Advisers.
Elsewhere, indications of monthly chain store salesshow retailers did better than expected in February. Analysts expect retailers, on average, will show a 3.6 percent gain in sales.
The major department stores all rose after reporting strong sales, including Saks, Macy's, JCPenney and Nordstrom. But Target, among the few retailers turning in a disappointing performance, warned that results in March may be weak as well given rising gas prices and a late date for Easter.
On the earnings front, Kroger gained after the grocery chain reported a boost in earnings, and announced a $1 billion share repurchase plan.
Foot Locker also rose after the sportswear and footwear retailer posted earnings that were better-than-expected, while Anheuser-Busch Inbev was unchanged after the beer manufacturer reported a 22 percent jump in earnings as higher margins offset falling U.S. sales.
Family Dollar Stores rejected a $7 billion bid from Trian Group, saying it "substantially undervalues" the retailer and added that selling the company would not be in the best interest of shareholders.
And came closer to buying out the rest of BSkyB for $14 billion when a British official supported the media conglomerate's proposal.
Also in economic news, the Labor Department said the pace of U.S. nonfarm productivity slowed. Productivity rose at a 2.6 percent annual rate, and at a 2.3 percent pace in the third quarter, which was expected.
And the Institute for Supply Management's index of non-manufacturingrose to 59.7 in February, more than expected. The employment component of the index rose to 55.6 from 54.5, while the prices paid index rose to 73.3.
On Tap This Week:
THURSDAY: Money supply; Earnings-after-the-bell from Novell.
FRIDAY: Non-farm payrolls report, factory orders; Federal Budget Deadline.
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