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US stocks surge on promising economic data

NEW YORK, March 3, 2011 – US stocks soared Thursday sparked by new data showing steady improvement in the jobs market, retail sales and the economy\’s service sector, and as oil prices eased slightly.

The Dow Jones Industrial Average closed 191.40 points (1.59 percent) higher at 12,258.20, while the broader S&P 500 index rose 22.53 (1.72 percent) to 1,330.97.

The tech-heavy Nasdaq Composite gained 50.67 points (1.84 percent) at 2,798.74.

The market jump came as new data releases strengthened the view that the economic recovery is gaining pace.

The government reported that initial jobless claims dropped to 368,000 in the week ending February 26, the lowest level since late May 2008, and better than expected.

A private-sector survey showed February sales in chain stores were strong, while another gauge showed the vast US service sector grew for a 15th consecutive month in last month, with increases in firms\’ employment, production and prices.

Even with the trouble in Libya, investors "saw the good US economic data of the past two days and decided that there would be very good employment figures Friday" when the government releases its new monthly jobs report, said Gregori Volokhine of Meeschaert Capital Markets.

A drop in oil prices following a Venezuelan offer to mediate the conflict in Libya also helped the market.

Analysts at Briefing.com said that "skepticism over the substance of mediation offered by Chavez kept (oil) prices relatively close to the flat line throughout the session."

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Most sectors were higher with Caterpillar, up 3.3 percent, leading a strong surge by major capital goods firms.

Apple gained 2.1 percent a day after founder Steve Jobs reappeared from sick leave to introduce the new iPad 2 on Wednesday.

Bond prices fell. The yield on the 10-year Treasury rose to 3.57 percent from 3.46 percent late Wednesday. The 30-year note yield rose to 4.64 percent from 4.55 percent.

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