US Stocks Rise, Push S&P 500 Back to Record

(AP) -- Stocks were moderately higher in early trading Thursday, helped by some modestly positive economic data as well as a continued belief that the U.S. economy is recovering from the pandemic and inflation, while higher than usual, will not be a long-term problem.

The S&P 500 index rose 0.5% as of 10 a.m. Eastern. The Dow Jones Industrial Average rose 0.7% and the Nasdaq Composite rose 0.7%.

Markets have calmed notably since the Federal Reserve surprised investors last week by saying it could start raising short-term interest rates by late 2023, earlier than expected, if recent high inflation persists.

The super-low rates the Fed engineered to carry the economy through the pandemic have propped up prices across markets, and any change would be a big deal, so the Fed's announcement triggered selling of stocks and a rise in Treasury yields last week. However that selling reversed this week. The three major indexes are all up more than 2% this week and are once again near records.

Investors had little negative reaction to a report that showed that 411,000 Americans filed for unemployment benefits last week, down 7,000 from the week before. That was a much more modest decline than investors had expected, and the second week in a row where unemployment benefits claims stalled after declining steadily for months.

Meanwhile, orders to U.S. factories for big-ticket manufactured goods rose for the 12th time in the last 13 months in May, pulled up by surging demand for civilian aircraft. The Commerce Department said Thursday that orders for durable goods -- meant to last at least three years -- climbed 2.3% in May, reversing a 0.8% drop in April and coming despite a backlogged supply chain and a shortage of workers.

The yield on the 10-year Treasury note was at 1.47% largely unchanged from a yield of 1.48% late Wednesday.

Shares of drugstore chain Rite Aid plunged nearly 15% after the company said it expects to report a loss for the year, due to pressure on its pharmacy benefits services and lower-than-expected sales.