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NEW YORK – Stocks rose in early trading Thursday after retailers reported better-than-expected February sales and Wal-Mart increased its dividend.
Macy's Inc., Limited Brands Inc. and The Wet Seal Inc. all posted monthly sales that topped analysts' expectations. Wal-Mart Stores Inc. said it is increasing its annual dividend 11 percent.
A rebound in consumer spending, which accounts for more than two-thirds of economic activity, is needed to help the economy rebound. But sales aren't likely to post consistent growth until the job market improves.
The Labor Department said initial jobless claims dipped last week after two straight weeks of unexpected increases. New claims fell to 469,000, better than the 470,000 economists had forecast.
Despite those positive economic signs, investors are avoiding making any big moves ahead of Friday's monthly employment report. That report will provide the best picture yet on whether the employment landscape truly is improving.
In early morning trading, the Dow Jones industrial average rose 32.87, or 0.3 percent, to 10,429.63. The Standard & Poor's 500 index rose 2.63, or 0.2 percent, to 1,121.42, while the Nasdaq composite index rose 1.20, or 0.1 percent, to 2,281.88.
The Labor Department is expected to say Friday that the unemployment rate rose to 9.8 percent in February from 9.7 percent in January as employers cut 50,000 jobs. Economists predict, though, that both average hourly earnings and average hours worked both rose slightly. Each are considered signs of future jobs growth.
Two other reports due out later Thursday should provide further glimpses of the overall economic picture.
A report on factory orders from the Commerce Department is expected to show the industrial sector is continuing to rebound. Economists forecast orders grew 1.8 percent last month after rising 1 percent in January.
Meanwhile, economists predict an index measuring signed contracts to buy previously occupied homes rose to 97.6 in January, from 96.6 a month earlier.
A collapse of the housing market helped push the economy into recession. However, recent reports have shown the sector is stabilizing.
Stocks have barely budged over the past two days as investors prepare for the monthly employment report. The Dow fell 9 points Wednesday, a day after rising two points.
Major indexes retreated Wednesday afternoon from early session highs after the Federal Reserve said economic recovery would be slow. The Fed's beige book report, which measures economic activity on a regional basis, indicated a recovery will be slow because of weak loan demand and a soft job market.
