U.S. stocks rose modestly on Thursday, partially rebounding after a recent bout of weakness, though a surprise drop in retail sales and a weak outlook from Intel limited the day's gains.
Wall Street has been on a downtrend of late, with the Standard & Poor's 500 Index down in eight of the past 11 sessions, shedding 3% over the past four sessions alone.
The weakness has largely been driven by concerns the Federal Reserve could raise rates as early as June. Last week's strong payroll report solidified this view, as the central bank said it would begin raising rates when it deemed the economy strong enough to handle it.
In the latest data, jobless claims fell far more than expected in the latest week, supporting a theory that the labor market is rapidly strengthening. Retail sales unexpectedly dropped for a third month in February.
"I've been a believer in a June rate hike for a while, but the odds really went up on Friday, and the market action we've seen since then is in line with the volatility we've historically seen around rate hikes," said James Liu, global market strategist for JPMorgan Funds in Chicago.
Intel Corp slashed its revenue forecast for the first quarter, citing lower-than-expected demand for business PCs and lower inventory levels across the PC supply chain.
Shares of the Dow component fell 3% to $31.35 and limited the Nasdaq's advance.
The U.S. dollar index fell 0.8% but remains up about 10% for the year, building on last year's rise of nearly 13%.
"The dollar has been strengthening dramatically, which investors are correctly interpreting as implying weak earnings growth over coming quarters," Liu said. S&P 500 earnings are now expected to decline 2.7% in the first quarter from a year ago, Thomson Reuters data showed.
Lumber Liquidators rose 3.6% to $33.94 in volatile trading. The company, facing U.S. government investigations over claims of dangerous levels of a cancer-causing substance in its flooring products, stood by the safety its products and offered free indoor air-quality testing for qualifying consumers.
JA Solar rose 6.5% to $9.60 after results. Shake Shack tumbled 9% to $42.60 after it forecast slowing same-restaurant sales growth in 2015.
The Dow Jones industrial average rose 161.04 points, or 0.91%, to 17,796.43, the S&P 500 gained 14.4 points, or 0.71%, to 2,054.64 and the Nasdaq Composite added 13.82 points, or 0.28%, to 4,863.76.
Advancing issues outnumbered declining ones on the NYSE by 2,366 to 393, for a 6.02-to-1 ratio; on the Nasdaq, 1,693 issues rose and 579 fell for a 2.92-to-1 ratio favoring advancers. The benchmark S&P 500 was posting 11 new 52-week highs and 7 new lows; the Nasdaq Composite was recording 67 new highs and 33 new lows.