Stocks Rebound; Disney, Coke Lead Dow

Stocks rebounded Thursday as jobless claims came in better than expected and three Dow components received analyst upgrades.

Stocks had bobbled midmorning after a report showed an unexpected drop in pending-home sales.

The Dow Jones Industrial Average was up about 30 points, while the S&P 500 and Nasdaq were lower.

Pending-home sales fell 7.6 percentin January due to rough weather in the Northeast, the National Association of Realtors reported. Still, the gauge is up 12.3 percent from a year ago.

Among the other mid-morning reports: Factory orders rose 1.7 percentin January, the Commerce Department reported, the biggest increase in four months. And mortgage rates fell last week: The 30-year fixed dropped to 4.97 percent from 5.05 percent the prior week.

Earlier, the Labor Department reported that jobless claims fell by 29,000last week, roughly on par with expectations. At the same time, productivity improved.

This came after a pair of encouraging jobs reports yesterday — ADP reported the private sector shed 20,000 jobs in February and Challenger, Gray & Christmas reported that planned layoffs dropped to 42,090, their lowest level in four years.

All three are being closely watched ahead of Friday's jobs report, which is currently expected to show 50,000 jobs were dropped from payrolls last month and the unemployment rate ticked up to 9.8 percent.

John Canally, an economist at LPL Financial, cautioned that the last three times there were big snowstorms — 1993, 1996 and 2003 — the payrolls number missed by 240,000. Though this time, hiring of census workers has offset the number in the other direction.

"The market's trying to get a clean read on the economy but can't because of the weather, census-worker hiring" and other factors, Canally said. "Throw in Fed tightening, China tightening — it adds to the volatility."

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  • Still, Canally thinks the job market is about turn.

    "I think you're getting close to ... modest job growth," Canally said.

    His current picks reflect the business-led nature of this recovery: Technology and industrials. He also likes consumer staples. And, below $80, he likes oil.

    The Dow has had single digit moves in three of the past four sessions, something that's not been seen since February 2007. That comes ahead of Friday's February jobs report and the continuing uncertainty over the Greek debt crisis.

    Disney, Coke and Boeing were the biggest gainers on the Dow. All three benefited from analyst upgrades: UBS raised its rating on Coke to "buy" and its rating on Boeing to "neutral." Bank of America/Merrill Lynch raised its rating on Disney to "buy."

    Among the early buzz in the market, Greece is launching of a 10-year euro-denominated bond issue. Demand for that issue will send more clear signals to the markets about Greece's chances for climbing out of its financial hole. Early indications are that the bond is strongly oversubscribed. The Greek government plans to raise 5 billion euros, with orders now reaching more than 14 billion euros.

    Both the Bank of England and the European Central Bank left interest rates unchanged.

    Retailers released February sales this morning, topping expectations, as leaner inventories and fewer discounts helped offset bad weather.

    Macy's was up more than 1 percent and teen chain Abercrombie & Fitchshot up 10 percent.

    Wal-Mart rose after the discount chain raised its dividend.

    Shares of drug maker Dendreon advanced following news that its cancer vaccine Provenge improves three-year survival rates by 40 percent.

    Energy stocks were weak as the dollar strengthened and a buildup of inventories sent crude prices lower. Dow components ExxonMobil and Chevron were off about half a percent.

    Still to Come:

    THURSDAY: Citi's Pandit testifies at COP hearing;Fed's Bullard, Evans speak; Earnings from Marvell Tech after the bell
    FRIDAY: February jobs report; consumer credit

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