Stocks on pace for first weekly gain in 6 weeks

FILE – In this file photo taken June 14, 2011, traders work on the floor of the New York Stock Exchange. Global stock markets fell sharply Thursday, June 16, amid fears that Greece’s debt crisis is spiralling out of control and fresh worries over China’s economy.(AP Photo/Richard Drew, file)

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NEW YORK (AP) — Better-than-expected reports on home building and jobs put stock indexes on track for their first weekly gain in a month and a half.

Construction of new homes grew faster than expected last month, the government reported Thursday. The number of people who applied for unemployment benefits also fell last week to 414,000, more of an improvement than economists expected. Weekly applications for unemployment have been over 400,000 since April, a rate that suggests job growth is still slow.

The Dow Jones industrial average rose 88 points, or 0.7 percent, to 11,985 in midday trading. The SP 500 rose 8, or 0.6 percent, to 1,273. The Nasdaq composite rose 9, or 0.4 percent, to 2,640.

Home Depot Inc. rose 2.3 percent, the most of the 30 stocks that make up the Dow, following the better than expected report on home construction. Kroger Co. rose 4.6 percent after the supermarket chain’s earnings rose as shoppers paid more for groceries and gas. And Winnebago Industries Inc. tumbled nearly 20 percent after the motor home company said profits fell nearly 80 percent in its last quarter.

Not all the economic news was positive. A survey by the Federal Reserve Bank of Philadelphia found that manufacturing slowed in that region, one day after a similar report found that manufacturing was slowing in the New York area. A series of weaker economic indicators over the past two months have led some analysts to trim their expectations for the year.

Investors are now starting to expect negative economic news, said Uri Landesdman, president of Platinum Partners, an investment manager in New York. That dulls the impact of each downward sign, he said.

“There’s still a feeling out there that even though economic data has been incrementally terrible, businesses are still cooking,” Landesman said. He also cautioned that the market could continue to slide until the next batch of corporate earnings reports, which start to come out in mid-July.

Overseas markets dipped for a second day because of fears that Greece will be forced to default on its bonds, an event that could trigger another financial crisis. The Euro Stoxx 50, an index of blue chip companies in countries that use the euro, fell 0.5 percent. Benchmark indexes in Japan and China each closed with losses of more than 1.5 percent.

U.S. stocks have fallen for six straight weeks because of rising concerns that the economy isn’t as strong as previously thought. High gas prices and a recession in Japan following its earthquake and nuclear disaster have combined to slow business and consumer spending. The SP index is down nearly 7 percent since hitting its high for the year on April 29.

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