U.S. stocks edged higher on Thursday, cutting the morning's modest losses as surprisingly strong March retail sales helped offset worries over the latest twist in Greece's fiscal crisis.
Online merchant Amazon.com
Investors snapped up retailers' shares after top U.S. retail chains reported a record increase in March same-store sales. The early Easter holiday and an improving job market helped retailers beat Wall Street's forecast.
An S&P retail index <.RLX> rose 0.9 percent.
But Wall Street's enthusiasm about retailers' strength and consumer spending was curbed by another wave of worry about Greece, which has weighed on investor psyche for months. Investors unloaded Greek assets on Thursday as the government bond market priced in the threat of a liquidity crunch for the euro zone member -- even as Athens sought to reassure markets it was not at risk of default.
The message from major retailers is consumer confidence and willingness to spend are improving, said Craig Peckham, equity trading strategist at Jefferies & Co in New York.
But risk-taking was curbed by the widening of credit spreads on Greek sovereign debt, he said.
There's speculation the bailout plan appears to be increasingly at risk, Peckham said.
The Dow Jones industrial average <.DJI> gained 13.37 points, or 0.12 percent, to 10,910.89. The Standard & Poor's 500 Index <.SPX> rose 1.47 points, or 0.12 percent, to 1,183.92. The Nasdaq Composite Index <.IXIC> added 3.07 points, or 0.13 percent, to 2,434.23.
Cyclical stock sectors, such as energy, materials and industrials, which are sensitive to economic uncertainty, curbed the Dow's and the S&P 500's gains. Caterpillar Inc
Wall Street got a jolt of good news early in the session when major U.S. retail chains reported a record 9.1 percent jump in March same-store sales. That beat the forecast for a 6.3 percent gain, according to Thomson Reuters data. Of the 28 retailers that Thomson Reuters tracks, more than 90 percent topped estimates.
The pick-up in consumer spending, which accounts for roughly two-thirds of U.S. economic activity, could point to stronger corporate earnings and boost stocks.
Shares of United Airlines parent UAL Corp
In the latest snapshot of the job market, initial claims for state unemployment benefits unexpectedly rose 18,000 to a seasonally adjusted 460,000, the Labor Department said, reflecting volatility in the data associated with the Easter holidays. Economists expected first-time claims to slip to 435,000.
But a hopeful sign for the job market came from continuing jobless claims, which fell to the lowest since December 2008.
(Reporting by Rodrigo Campos; Editing by Jan Paschal)