The pace of new home sales rose in September from a weaker August number, and orders for long-lasting manufactured goods dropped, according to data released on Thursday that showed a slow-growing economy.

Stocks rose after the home sales data, released in midmorning, suggested that the stumbling housing market was no worse than feared, while the dollar remained lower and U.S. Treasury bond prices flipped into negative territory.

The Commerce Department said new single-family home sales rose 4.8 percent to an annual rate of 770,000 units, from a downwardly revised August pace of 735,000. The August figure was previously reported at 795,000.

Analysts polled by Reuters had expected an annual rate of 780,000, so the number was below expectations, but economists and investors took solace in the fact that underlying trends looked somewhat more promising.

"There is some good news in these numbers with slightly lower inventories and a 2.5 percent rise in the median sales price of a new home. But it's clear that we're not out of the woods -- far from it," said Michael Schenk, senior economist with Credit Union National Association and Affiliates in Washington.

Durable goods orders fell 1.7 percent in September on the back of a sharp drop in transportation orders. Analysts polled by Reuters were expecting a 1.5 percent rise in total orders last month after a 5.3 percent decline in August, earlier estimated as a 4.9 percent decrease.

Even when volatile data for transportation and defense orders were stripped away, the total was weaker than expected.

"From a longer-term perspective, durable goods orders are still running below year-ago levels, not least because of sharply reduced housing-related orders," said Roger Kubarych of UniCredit in New York. "But in the short term, there is nothing in today's report to justify fears of an imminent recession."

Transportation equipment orders fell 6.3 percent on a 37.3 percent slide in defense aircraft and parts orders. Motor vehicle and parts orders were down 2.9 percent. After stripping out transportation, orders rose 0.3 percent, weaker than the 0.7 percent rise analysts were expecting.

In another report, the Labor Department said the number of U.S. workers filing new claims for jobless aid fell by a much less than expected 8,000 last week, which left claims at fairly high levels.

Initial claims for state unemployment insurance benefits totaled 331,000 in the week ended October 20 following the prior week's upwardly revised 339,000, which originally had been reported as 337,000. Economists surveyed by Reuters had forecast a much lower total of 320,000 claims for last week.

A Labor Department official said there were no special factors to explain last week's numbers, but noted that there might be some volatility in the data due to layoffs and rehiring in the automobile industry linked to recent industrial action.

The number of so-called continuing claims rose by a modest 7,000 to 2.53 million in the week ended October 13, the latest period for which figures were available. The continuing claims total was lower than economists' median forecast for 2.54 million claims.