U.S. stocks rise on global data, jobless claims amid Nasdaq halt

U.S. stocks rose on data showing improvement in global manufacturing and the American labor market amid a three-hour trading halt on the Nasdaq Stock Market after a computer error.

A gauge of homebuilders added 2.1% after a report showed house prices rose 7.7% in June from a year ago. Yahoo Inc. rallied 3.2% as data showed it attracted more U.S. visitors than Google Inc. in July. Hewlett-Packard Co. slid 12% after the personal computer maker’s quarterly profit forecast missed some analysts’ estimates. Abercrombie & Fitch Co. plunged 17% as second-quarter earnings that fell short of forecasts.

The S&P 500 gained 0.9% to 1,657.70 at 3:31 p.m. in New York. The Dow Jones Industrial Average rose 78.50 points, or 0.5%, to 14,976.05. Trading in S&P 500 stocks was 29% below the 30-day average at this time of day.

Computer errors shook American equity markets again as malfunctioning software that feeds data between exchanges prompted Nasdaq to halt trading in stocks and options today. The Nasdaq rose 0.9% to 3,631.17 today before stopped around 12:20 p.m. in New York. Trading resumed at 3:25 p.m., with the Nasdaq up 0.9% to 3,632.93.

“The employment numbers were encouraging and showed a continuation of slow growth in employment,” Paul Mangus, head of equity strategy and research for Wells Fargo Private Bank in Charlotte, North Carolina, said in a telephone interview. His firm manages $170 billion. “There are signs of stabilization in China and improvement in Europe, which could help U.S. multinationals in the long run.”

Virtual Halt

Buying and selling in many of the country’s most heavily traded shares from Apple Inc. to Intel Corp. and Facebook Inc. ground to a virtual halt today after the second-biggest stock market operator in the U.S. halted transactions in what it calls Tape C, which comprises all Nasdaq-listed securities.

The disruption, just two days after options markets were roiled by mistaken trades sent by Goldman Sachs Group Inc., is the latest in a series of computer malfunctions that have raised questions about the reliability of electronic markets.

Nasdaq faced criticism last year when it mishandled the public debut of Facebook, causing hundreds of millions of dollars in losses for its member firms. The company’s shares fell 3.4% to $30.47, after earlier rising as much as 1.1%.

Fed Stimulus

The S&P 500 fell 0.6% yesterday to the lowest level since July 8 as minutes from the Federal Reserve’s July meeting showed officials support stimulus cuts this year if the economy improves. The Dow declined for a sixth day, the longest losing streak in 13 months.

Fed stimulus helped push the S&P 500 up as much as 153% from its March 2009 low, as better-than-estimated corporate earnings also fueled equity gains. Of the 483 companies in the S&P 500 that have reported quarterly earnings this period, 71% surpassed profit estimates, Bloomberg data show.

The fewest workers in more than five years applied for U.S. unemployment benefits over the past month, indicating the labor market continues to improve.

The number of claims in the month ended Aug. 17 declined to 330,500 a week on average, the least since November 2007, a Labor Department report showed today in Washington. Compared with a week earlier, claims rose by 13,000 to 336,000, in line with the median forecast of 48 economists surveyed by Bloomberg.

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