Resilient Markets Power Ahead; Dow Lands at '10 High

FOX Business: The Power to Prosper

Wall Street dodged a slew of potential obstacles on Thursday as the bulls managed to push the Dow to fresh two-year highs and the Nasdaq Composite nearly 1% higher.

Today's Markets

The Dow Jones Industrial Average rose 41.78 points, or 0.36%, to 11499.25, the Standard & Poor's 500 gained 7.64 points, or 0.62%, to 1242.87 and the Nasdaq Composite jumped 20.09 points, or 0.77%, to 2637.31. The FOX 50 picked up 5.38 points, or 0.61%, to 891.32.

While the markets landed solidly in the green, it was a choppy session as Wall Street had a number of headwinds to overcome, including a potential snag for the tax bill in the House, tumbling shares of Visa (NYSE:V) and MasterCard (NYSE:MA) and FedEx’s (NYSE:FDX) earnings dud.

But ultimately Wall Street avoided the late-day selloff that had clipped rallies in each of the previous three trading days as the bulls focused on the latest signs the economy is slowly improving, highlighted by a surprise jump in a regional manufacturing index.

“There are lots of things fluctuating out markets,” said Jonathan Corpina, senior managing partner at Meridian Equity Partners, pointing to tax talks in Congress, economic data and the European debt mess. “It just seems like the fluctuating is going to the upside right now.”

Most Dow stocks advanced, led by aluminum maker Alcoa (NYSE:AA) and Bank of America (NYSE:BA). The index's weakest links were JPMorgan Chase (NYSE:JPM) and American Express (NYSE:AXP).

Lifted by tech stocks like SanDisk (NASDAQ:SNK) and Adobe (NASDAQ:ADBE), the Nasdaq Composite outperformed the broader markets and posted strong gains.

Industrial stocks like Honeywell (NYSE:HON) were among the best performers, rallying around a Philly Fed report showing regional manufacturing activity index unexpectedly jumped in December from a reading of 22.5 to 24.3. Economists had been bracing for a decline to a reading of just 18.

Wall Street's hopes for an improving jobs market were boosted a bit as the Labor Department said weekly jobless claims slid by an in-line 3,000 last week to 420,000. Continuing jobless claims rose slightly to 4.14 million. The four-week moving average, which aims to smooth out volatility, slumped to its lowest level since early August 2008.

Also on the economic front, the Commerce Department said housing starts rose 3.9% in November to an annualized rate of 555,000 units. Economists had forecasted a stronger increase of 6%. Building permits slid 4% last month to a rate of 530,000 units.

Wall Street largely shrugged off concerns about FedEx, which reversed an early 2% slump that had been sparked after it badly missed estimates with non-GAAP EPS of $1.16. FedEx, which is seen as an economic bellwether did increase its guidance for its fiscal year, but the midpoint of the new range would trail expectations.

Traders were also keeping an eye on Washington as the compromise bill to extend the Bush tax cuts by two years hit an apparent snag in the House of Representatives just a day after easily passing the Senate. The deal has been seen as bullish for the economy and stocks because it has stimulative measures and removes a lot of uncertainty.

Likewise, the selloff in shares of Visa and MasterCard was largely contained to the card sector. Shareholders were spooked by proposed rule changes from the Federal Reserve to cap debit-card fees at 12 cents.

The euro also narrowly avoided declining against the dollar for the eighth time in nine sessions. At a summit, the European Union agreed to change its governing charter to create a permanent rescue fund for countries in crisis and the European Central Bank announced plans to increase its capital base by $14.3 billion to help it fight its sovereign debt crisis.

Spain, which was hurt on Wednesday by a credit downgrade warning from Moody's, sold $3.2 billion of bonds on Thursday at a relatively high yield.

On the commodities front, crude oil slid 92 cents a barrel, or 1.04%, to $87.70. Gold sank $15.10 a troy ounce, or 1.09%, to $1,3670.40.

Corporate Movers

General Mills (NYSE:GIS) revealed a weaker-than-expected 8.6% rise in fiscal second-quarter profits and a non-GAAP EPS of 76 cents. Analysts had called for a profit of 78 cents a share. Revenue inched up just 0.8% to $4.07 billion, trailing consensus calls for $4.11 billion.

Discover Financial (NYSE:DFS) slumped 3.5% after saying it earned 64 cents a share. The credit card lender's results were mostly driven by slashing the money it sets aside to cover bad loans.

American Express (NYSE:AXP) inked a $660 million deal to acquire European marketing firm Loyalty Partners. AmEx said it would pay an additional 71 million euros to Loyalty's current management over the next five years based on the business's performance.

RiteAid (NYSE:RAD) posted a third-quarter loss of 9 cents a share, dragged down by a 2.3% slide in sales to $6.2 billion. The No. 3 U.S. drugstore operator also worsened its full-year loss outlook.

Global Markets

The U.K.'s FTSE 100 slipped 0.02% to 5881.12, Germany's DAX gained 0.11% to 7024.40 and France's CAC 40 advanced 0.21% to 3888.36.

In Asia, Japan's Nikkei 225 inched up 0.01% to 10311.30,  Hong Kong's Hang Seng slumped 1.33% to 22668.80 and China's Shanghai Composite lost 0.46% to 2898.14.