Stocks Edge Higher as Budget Talks Move Ahead
NEW YORK - Optimism that a budget deal will be reached in Washington helped lift the stock market in early Thursday trading. A pair of economic reports also brightened the mood.
A half-hour after the opening bell, the Dow Jones industrial average was up 50 points at 13,034. UnitedHealth Group led the 30 stocks in the Dow, rising 66 cents to $53.43.
Lawmakers are negotiating a deal to avoid the "fiscal cliff," a collection of tax hikes and federal spending cuts set to start Jan. 1. Later Thursday, Treasury Secretary Timothy Geithner will meet with Senate Republican Leader Mitch McConnell and Senate Democratic Leader Harry Reid to push the negotiations forward.
In other trading, the Standard & Poor's 500 index rose seven points to 1,416 while the Nasdaq composite gained 19 points to 3,011.
The Commerce Department raised its estimate for U.S. economic growth to an annual rate of 2.7 percent in the July-through-September period. That's much better than the 2 percent rate estimated a month ago and more than twice the 1.3 percent rate logged in the three previous months.
Growth during the end of the year is likely to take a hit from Superstorm Sandy, along with worries that Congress won't avoid falling over the fiscal cliff. Economists estimate that growth is slowing to a rate below 2 percent in the current October-December period.
The Labor Department also reported that the number of Americans applying for unemployment benefits dropped to 393,000 last week, in line with what economists had expected. It was the second straight drop after Superstorm Sandy drove applications higher earlier this month.
Some retail stores posted poor sales numbers, driving their stocks lower. It's a critical time for retailers, who log a huge chunk of their yearly profits in the weeks running up to the holidays.
Kohl's plunged $5.41, or 10 percent, to $45.74, the most in the S&P 500 index. The company posted a drop in sales and said stores in the Mid-Atlantic and the Northeast, areas hit by Superstorm Sandy, fared the worst. Results at Target, The Gap, and others also fell short of Wall Street expectations.
Kroger Co. rose 82 cents to $25.88 after the supermarket chain reported stronger quarterly profits and raised its earnings outlook for the year. Stronger sales helped the operator of Fred Meyer and Food 4 Less stores post better results than analysts had expected.