Green light for stocks

March 7, 2002 Posted: 1356 GMT

NEW YORK (CNN/Money) -- Another round of hopeful signs on the economy and consumer spending could keep U.S. stocks rising early Thursday as investors await Federal Reserve Chairman Alan Greenspan's return to Capitol Hill.

Early indications pointed to modest opening gains for the major U.S. indexes.

The number of Americans filing for first-time jobless claims fell by 5,000 to 376,000 last week, the government said, as the pace of layoffs again slowed to levels seen last August.

A separate report showed that fourth-quarter productivity was revised up sharply, to a 5.2 percent improvement, as companies became more efficient. Elsewhere, J.P. Penney and Wal-Mart Stores led a list of retailers posting strong February sales.

Greenspan, in his semi-annual economic report to Congress, is likley repeat the prepared testimony he gave a House panel Feb. 27. That testimony painted a picture of a recovery, although he cautioned that the rebound will be modest and could be sidetracked.

But in addition to the latest data, intervening reports have showed strength in factory orders, manufacturing, services, and fourth-quarter economic growth.

"There's been a slew of positive data in between," Art Hogan, chief market strategist at Jefferies & Co, told CNNfn's Before Hours.

Those reports have helped fuel powerful rallies in stocks since last Friday.

The Dow Jones industrial average starts at 10,574.29 after Wednesday's 141-point advance sent it 5.5 percent higher on the year, The Nasdaq composite index, after four straight days of gains that include Wednesday's 24-point push, is at 1,890.40. The Standard & Poor's 500 begins at 1,162.77 after a 16-point gain pushed it higher for the year.

Asian stocks closed higher Thursday, with Tokyo's Nikkei index up more than 2.5 percent. European markets gained at midsession.

Treasury prices slipped, with the 10-year note yield rising to 5.07 percent from 5.05 percent Wednesday. The dollar fell sharply against the yen, which rose to a three-month high, and was flat versus the euro. Brent oil futures rose 51 cents to $23.34 a barrel in London, where gold opened lower.

The crowds at malls during Presidents Day weekend appeared to lift retailers' February sales. J.P. Penney (JCP: Research, Estimates)  reported a strong 12.5 percent February increase in sales of department stores open a year or more. Separately, Wal-Mart Stores (WMT: Research, Estimates)  reported a 10.3 percent same-store February increase. Wal-Mart shares rose 10 cents to $61 before hours while Penney gained 26 cents to $19.19 Wednesday.

AnnTaylor Stores (ANN: Research, Estimates)  said late Wednesday that fiscal fourth-quarter profit rose to 34 cents a share, as the women's clothing retailer topped forecasts by a penny. Shares rose $1.46 to $41 Wednesday.

Both Intel (INTC: Research, Estimates)  and Sun Microsystems (SUNW: Research, Estimates)  discuss business conditions during mid-quarter updates after the close of trading. Intel gained 30 cents to $33.26 in before-hours trading Thursday while Sun rose 36 cents to $9.39.

Bokerage Merrill Lynch (MER: Research, Estimates) said late Wednesday it may sell $1 billion in zero-coupon notes convertible into company stock. Merrill shares slid $1.75 to $52.65 in before-hours trading Thursday.

IBM (IBM: Research, Estimates)  said that Nestle, the food and beverage company, will pay the technology company more than $500 million to provide it with servers, storage systems and database software over the next five years. IBM gained 70 cents to $107 Wednesday.

But shares of Celgene (CELG: Research, Estimates)  tumbled $5.37 to $22.40 before hours after the drug developer said an application to market its Thalomid drug for use in cancer patients would be delayed.