Wall Street up

US stocks rose for a third straight day on Thursday as investors viewed company results and manufacturing data as evidence the economic rebound will continue. But stock index futures dropped steeply after the closing bell when the Federal Reserve announced it was raising the discount rate that it charges banks for emergency loans. Investors have relied heavily on near-zero interest rates and have shovelled cheap money into riskier investments like equities and commodities that yield more returns.
The Fed move, despite being a signal the economy is on the right track, marks a retreat from the easy money policy. Bank stocks could take the brunt of any fall. The Select Sector SPDR Financial fund fell 1 percent after the Fed news. S&P 500 futures fell 9.7 points about 5 pm (2200 GMT) and were below fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures lost 68 points and Nasdaq 100 futures shed 13 points.
During the regular session investors accentuated the positive news, focusing on improved mid-Atlantic manufacturing data and setting aside a lacklustre outlook from Wal-Mart Stores Inc and a surprising increase in weekly jobless claims. "News on the economy was mixed," said Jim Awad, managing director at Zephyr Management New York. "There's a tug of war, with a slight upward bias based on a moderate cyclical recovery on the economy."
The Dow Jones industrial average rose 83.66 points, or 0.81 percent, to 10,392.90. The Standard & Poor's 500 Index added 7.24 points, or 0.66 percent, to 1,106.75. The Nasdaq Composite Index gained 15.42 points, or 0.69 percent, to 2,241.71.
Government reports showing higher-than-expected weekly applications for jobless insurance and higher producer prices in January were more than offset by data showing gains in the Philadelphia Fed's business activity index and a 10th straight monthly rise in the Conference Board's index of leading economic indicators.
Wal-Mart held down gains after the world's largest retailer forecast results for the current quarter that could miss Wall Street's estimates. Shares fell 1.1 percent. About 7.24 billion shares were traded on the New York Stock Exchange, the American Stock Exchange and Nasdaq, below last year's estimated daily average of 9.65 billion. Advancing stocks outnumbered declining ones on the NYSE by a ratio of about 9 to 4, while on the Nasdaq about seven stocks rose for every five that fell.