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Stocks open little changed after employment data

Associated Press

Stocks finished mostly higher Thursday as several upbeat reports on the economy helped the market end a three-session losing streak that chopped 300 points off the Dow Jones industrials.

The rebound saw investors piling back into financial and healthcare companies while moving out of industries such as technology that had been leading the market.

A private research group said its forecast of economic activity rose more than expected in May, marking a second straight gain after seven months of declines.

In addition, the government said the number of people drawing unemployment benefits, counting both initial and continuing claims, fell last week for the first time since early January.

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And the Federal Reserve Bank of Philadelphia said manufacturing activity picked up in the mid-Atlantic region.

The Dow rose 58.42 points, or 0.7%, to 8,555.60, its biggest one-day gain in two weeks. Earlier in the day, the blue-chip gauge was up as much as 98 points.

The Standard & Poor’s 500 index rose 7.66 points, or 0.8%, to 918.37, but the tech-dominated Nasdaq composite index edged down 0.34 of a point to 1,807.72.

The Russell 2,000 index of smaller-company stocks rose 0.5%.

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Advancing shares outnumbered decliners by about 4 to 3 on the New York Stock Exchange. Volume was light.

Shares of financial companies led the market higher as Treasury Secretary Timothy F. Geithner appeared before the Senate Banking Committee, defending the regulatory overhaul proposed the day before by President Obama.

An index of the stocks of 24 major banks jumped 3%.

“I think the investing public likes the fact that there’s going to be more regulation in some areas where it was lacking,” said Joe Keetle, senior wealth manager at Dawson Wealth Management.

In his testimony, Geithner also said he had seen evidence of healing in the financial industry.

Bank of America shot up 4.9%, JPMorgan Chase climbed 4.4% and Wells Fargo rose 2.6%.

Healthcare shares extended gains from the day before as the Senate continued work on a major revamp of the medical-insurance system. Pharmaceutical maker Pfizer rose 2.3%, while Merck jumped 3.6%.

Tech stocks lost ground after SanDisk was downgraded by a Needham analyst. SanDisk sank 6.1%.

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The dollar was mixed against other major currencies, while gold prices fell.

Oil futures rose 34 cents to settle at $71.37 a barrel on the New York Mercantile Exchange.

Overseas, key stock indexes rose 0.1% in Britain, 0.8% in Germany and 1% in France. Japanese shares slumped 1.4%.


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