* Wal-Mart reports better-than-expected earnings
* U.S. retail sales fall in July
* Financials up on hedge fund manager's stake disclosures
* Stocks up: Dow 0.4 pct, S&P 0.7 pct, Nasdaq 0.5 pct
* For up-to-the-minute market news click []
(Updates to close)
By Chuck Mikolajczak
NEW YORK, Aug 13 (Reuters) - U.S. stocks rose on Thursday
as better-than-expected earnings by Wal-Mart Stores Inc <WMT.N>
helped offset disappointing government numbers on retail sales
and jobs.
Shares of Wal-Mart, the world's largest retailer, gained
2.7 percent to $51.88 following its second-quarter earnings and
its outlook for the full year. For details, see
[]
The rest of the retail sector was lukewarm, however, after
the U.S. Commerce Department reported retail sales fell 0.1
percent in July, defying market expectations of a gain.
Analysts had expected a boost to retail sales from the
government's "cash for clunkers" program that offers taxpayers
money for trading in gas guzzlers for more fuel efficient new
cars.
The S&P retail index added 0.3 percent.
Also on the negative side, the government said the number
of workers filing initial applications for unemployment
benefits rose by 4,000 to a seasonally adjusted 558,000.
Economists had anticipated a drop. []
"What really helped us this morning was Wal-Mart coming out
and kind of across the board saying early back-too-school
numbers were pretty good," said Warren Simpson, managing
director at Stephens Capital Management in Little Rock,
Arkansas.
"That kind of keyed the market, at least having some
resiliency and some support, and consequently, we've rallied
just a little here."
The market had surged on Wednesday after the Federal
Reserve said the economy appears to be "leveling out." But
Thursday's data served as a reminder that the economic picture
remains unsettled.
"To be up after a day like we had yesterday is a pretty
good day," Simpson added.
The Dow Jones industrial average <> rose 36.58 points,
or 0.39 percent, to 9,398.19. The Standard & Poor's 500 Index
<.SPX> gained 6.92 points, or 0.69 percent, to 1,012.73. The
Nasdaq Composite Index <> added 10.63 points, or 0.53
percent, to 2,009.35.
Financial stocks were among the bright spots, a day after
hedge fund manager John Paulson -- who had made a fortune
betting against financial companies after foreseeing the credit
crisis -- disclosed that he had bought large stakes in several
banks, including Bank of America. []
Bank of America <BAC.N> shares gained 6.7 percent to
$17.00, and the KBW Bank index <.BKX> gained 3.1 percent.
Stocks briefly extended gains at midday after a 30-year
U.S. Treasury bond auction was well received, providing a boost
to confidence in U.S. assets including stocks.
Homebuilder shares fell on a string of downgrades, with
D.R. Horton Inc <DHI.N> down 3.7 percent to $12.95 after
Citigroup cut its rating. KB Home <KBH.N> fell 2.5 percent to
$17.83 after a downgrade by Raymond James.
The Dow Jones U.S. Home Construction index <.DJUSHB> shed
1.5 percent.
Volume was light on the New York Stock Exchange, with 777
million shares changing hands, well below last year's estimated
daily average of 1.49 billion, while on the Nasdaq, about 1.01
billion shares traded, below last year's daily average of 2.28
billion.
Advancing stocks outnumbered declining ones on the NYSE by
a ratio of 1,999 to 1,036, while advancing stocks beat
decliners on the Nasdaq, by 1,462 to 1,197.
(Editing by Leslie Adler)
