US stocks rose on Thursday, led by industrial and pharmaceutical shares, as investors turned defensive ahead of jobs data that could show how much housing and tight credit markets may have damaged the economy. Shares of General Electric Co and United Technologies advanced as investors sought shelter in firms with diversified, multinational revenue streams.
Drug company shares were another favourite as biotech companies benefited from an optimistic earnings outlook issued by Biogen Idec Inc, the second top gainer on the Nasdaq. Big pharmaceuticals rose along with shares of Merck & Co Inc after the company prevailed in a court ruling related to its Vioxx arthritis drug.
Still, trading was light as the focus remained on Friday's nonfarm payrolls report. The data is expected to shed some light on the economy's performance in August as a faltering housing market nearly brought some credit markets to a standstill.
"Maybe, at the margin, it's keeping the market on hold a little bit because nobody wants to get too euphoric ahead of that tomorrow," said Sam Rahman, portfolio manager at Baring Asset Management Inc in Boston. The Dow Jones industrial average was up 57.88 points, or 0.44 percent, at 13,363.35. The Standard & Poor's 500 Index was up 6.26 points, or 0.43 percent, at 1,478.55. The Nasdaq Composite Index was up 8.37 points, or 0.32 percent, at 2,614.32.
Merck shares rose 2.2 percent to $50.47 on the New York Stock Exchange, while Biogen shares surged 5.8 percent to $66.53 on the Nasdaq. Other biotech stocks tracking Biogen upward included Gilead Sciences Inc, up 3.1 percent at $37.59, and Celgene Corp, up 2.3 percent at $66.59. Brokerage Sanford Bernstein is set to host a conference call on Friday to discuss why investors should be overweight in biotechnology stocks.
Retail chains, including Wal-Mart Stores Inc, reported sales data that topped analysts' expectations. Shares of Wal-Mart ended up 0.7 percent at $42.76. Early in the session, stronger-than-expected reports on the services sector and retailers' monthly sales pointed to underlying strength in the economy, although hopes dimmed for a series of Federal Reserve interest rate cuts.
The Institute for Supply Management said its non-manufacturing index pointed to growth in the vast US services sector last month, surprising economists who had on average expected a slight decline. Shares of Apple Inc fell for a second day after it said it would offer $100 store credit to early iPhone buyers. Apple announced on Wednesday that it was cutting the price on the device. Its shares slipped 1.3 percent to $135.01 after falling about 5 percent on Wednesday.
GE shares rose 1.7 percent to $39.40, while United Technologies advanced 2.1 percent to $75.01. Trading volume was below average on the NYSE, with about 1.28 billion shares changing hands compared with last year's estimated daily average of 1.84 billion. On Nasdaq, about 1.85 billion shares traded, down from last year's daily average of 2.02 billion. Rising stocks were outnumbering falling ones by a ratio of about 5 to 3 on the NYSE and by 4 to 3 on Nasdaq.
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