US STOCKS-Wall St rises 1 pct on jobless data, oil drop

                                

                                
 * Crude prices lower after Libyan peace plan put forth
                                
 * Jobless claims unexpectedly drop to 2-1/2 year low
                                
 * Retailers post strong Feb sales, March concerns loom
                                
 * Indexes: Dow, S&P and Nasdaq all rise 1.2 pct
                                
 * For up-to-the-minute market news see [STXNEWS/US]
  (Updates to open)
                                
 By Ryan Vlastelica
                                
 NEW YORK, March 3 (Reuters) -  U.S. stocks rallied more
than 1 percent in early trading on Thursday as crude oil prices
fell and jobless claims dropped to a 2-1/2 year low.
                                
 Initial jobless claims came in much stronger than expected
at 368,000, one day after a similarly robust ADP report on
private sector hiring. Taken together, the two could bode well
for Friday's February payroll report. For details, see
[ID:nOAT004756]
                                
 The Arab League said a peace plan for Libya was under
consideration, and while have some have questioned the
substance of the plan, put forth by Venezuela's Hugo Chavez, a
resolution could remove a major headwind to equities.
[ID:nLDE72200E]
                                
 Crude prices have spiked in recent weeks on concerns the
unrest in Libya could lead to supply disruptions, resulting in
a corresponding drop in stocks as market participants fretted
that high energy costs will weigh on economic activity.
                                
 "A peace plan would really be a great sign for markets,"
said Michael Mullaney, a portfolio manager who helps manage
$9.5 billion at Fiduciary Trust Co in Boston. "You could see a
precipitous drop in oil prices, perhaps to the $80-90 per
barrel range, which is the level we're looking at for it to no
longer be a concern for spending."
                                
 April crude futures fell 0.5 percent but remained above the
psychologically important $100 per barrel level. Brent crude
oil was down 1.5 percent.
                                
 The Dow Jones industrial average <.DJI> jumped 147.09
points, or 1.22 percent, at 12,213.89. The Standard & Poor's
500 Index <.SPX> was up 15.47 points, or 1.18 percent, at
1,323.91. The Nasdaq Composite Index <.IXIC> gained 32.79
points, or 1.19 percent, at 2,780.86.
                                
 Several top U.S. retailers posted bigger-than-expected
sales gains for February, though rising gas prices and a late
Easter holiday could temper sales in March. [ID:nN03203429]
                                
 The S&P retail index <.RLX> rose 0.7 percent, while the
Morgan Stanley retail index <.MVR> was up 0.4 percent.
                                
 Big Lots Inc <BIG.N> shares rose 2.2 percent to $40.72
after quarterly earnings beat expectations and it forecast
strong 2011 profits.
                                
 H.J. Heinz Co <HNZ.N> rose 0.2 percent to $49.10 after
quarterly income topped expectations and a deal to buy an 80
percent stake in a Brazilian food maker. [ID:nL3E7E3109] and
[ID:nN0374843]
                                
 The Institute for Supply Management's non-manufacturing
index came in at 59.7 in February, slightly above forecasts and
higher than the January result. Stocks were little changed
after the report. [ID:nEAP101300]
  (Editing by Jeffrey Benkoe)