* Defensive shares rise
* Jobless claims worse than expected
* United Tech says order rates stabilized
* Dow up 0.6 pct, S&P up 1 pct, Nasdaq up 1.5 pct
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(Adds details on volume)
By Leah Schnurr
NEW YORK, May 14 (Reuters) - U.S. stocks rose on Thursday
as investors returned to financial and technology shares on
bets the recent rally could have more room to grow after a
brief pullback.
Volume, however, was light, a possible indication of a lack
of broad conviction.
Technology gains were led by big-cap tech and semiconductor
companies after five straight days of losses for the PHLX
Semiconductor index <.SOXX>. Apple Inc <AAPL.O> was among the
top boosts on Nasdaq, rising 2.9 percent to $122.95, while the
PHLX index climbed 3.2 percent.
The surge in U.S. markets over the past two months has made
investors who missed the rally anxious to get back into stocks,
analysts said.
"We've had a bit of a correction over the last couple days
and people may be going in there and adding a bit, which makes
the gains sustainable," said Kurt Brunner, portfolio manager at
Swarthmore Group in Philadelphia, Pennsylvania.
Defensive stocks such as consumer staples and healthcare
also gave a lift, underscoring some of the lingering worry
about the economy following a report that showed a jump in
weekly jobless claims.
Coca-Cola Co <KO.N> was among the Dow's biggest lifts, up
2.9 percent at $44.90, and Merck & Co Inc <MRK.N> added 1.5
percent to $26.05.
The Dow Jones industrial average <> added 46.43 points,
or 0.56 percent, to 8,331.32. The Standard & Poor's 500 Index
<.SPX> gained 9.15 points, or 1.04 percent, to 893.07. The
Nasdaq Composite Index <> climbed 25.02 points, or 1.50
percent, to 1,689.21.
The gains in financials and technolgy were striking, coming
shortly after some analysts said the very same sectors would
likely lead the market lower, having underpinned its run-up
since March.
Shares of semiconductor companies got a lift after Bank of
America-Merrill Lynch raised its rating and price target on
shares of Novellus Systems <NVLS.O> citing cost cutting and
attractive valuations. Novellus, which provides equipment to
the semiconductor industry, rose 7.1 percent to $16.88.
Financial shares gained, including JPMorgan & Chase & Co
<JPM.N>, up 4.4 percent to $35.54, and Bank of America Corp
<BAC.N>, up 2.7 percent to $11.31. Bank stocks have been a
large part of the recent rally as investors bet that the sector
had seen the worst of the credit crisis.
The S&P 500 is up 32 percent from the bear market low on
March 9, but is down nearly 4 percent for the week as investors
reassessed the economic outlook.
Data showed the number of U.S. workers filing new claims
for jobless benefits rose more than expected in the latest
week, pushed up by plant shutdowns related to Chrysler's
bankruptcy. For details, see [].
The report came on the heels of Wednesday's figures showing
consumers were still reluctant to spend and reviving worries
over the length of the recession after optimism that the
downturn was showing signs of abating.
United Technologies Corp <UTX.N> was among the Dow's top
boosts, up 1.8 percent at $51.51. The world's largest maker of
elevators and air conditioners said order rates had stabilized
and it was starting to see early signs of recovery in China.
[].
Wal-Mart Stores Inc <WMT.N> reported flat first-quarter
earnings in line with analysts' estimates. Its chief executive
said overall business at the world's largest retailer was
stable, adding that until unemployment eased, it remained
cautiously optimistic about a timetable for the economic
recovery. [].
Wal-Mart shares were off 1.9 percent to $49.10.
Trading was moderate on the New York Stock Exchange, with
about 1.52 billion shares changing hands, above last year's
estimated daily average of 1.49 billion, while on Nasdaq, about
2.22 billion shares traded, below last year's daily average of
2.28 billion.
Advancing stocks outnumbered declining ones on the NYSE by
2,172 to 847 while advancers beat decliners on the Nasdaq by
about 1,825 to 838.
(Editing by Leslie Adler)
