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  • Dow Jones Industrial Average up 33.60 (+0.27%) to 12,529.75
  • S&P 500 up 1.82 (+0.14%) to 1,320.68
  • Nasdaq Composite down 10.74 (-0.38%) to 2,839.38

GLOBAL SENTIMENT

  • Hang Seng Index down 0.64%
  • Shanghai China Composite Index down 0.53%
  • FTSE 100 up 1.81%

Stocks staged a last-minute rally for the second day in row, erasing a slump that had the major averages down almost 1% mid-afternoon before rising to another small gain at the close.

Reports of a slump in Chinese bank lending coupled with somewhat disappointing U.S. data on durable-goods orders had equities grinding lower through most of the afternoon before financial stocks helped ignite the late-day surge after securities regulators were said to have ended their probe into the 2008 collapse of Lehman Brothers without recommending any action.

Consumer, healthcare and utility stocks traded higher as the session maintained a defensive tone. Commodities ended mostly higher. Technology stocks were weak throughout the day, keeping the tech-heavy Nasdaq Composite underwater at the close.

Equities turned lower this afternoon as three officials said China's biggest banks may fall short of loan targets for the first time in at least seven years as an economic slowdown crimps demand for credit. Earlier, the Commerce Department reported Thursday that durable-goods orders, excluding transportation, fell 0.6% last month for the third decline in four months. Overall, orders edged up 0.2% in April reaching a seasonally adjusted $215.5 billion after dropping 3.7% in March. Economists polled by MarketWatch had anticipated a 0.4% decline.

Earlier, stocks advanced after new jobless claims fell by 2,000 last week to 370,000, according to the U.S. Labor Department. Claims from two weeks ago were revised up to 372,000 from 370,000. Experts were expecting claims would rise to a seasonally adjusted 373,000 in the week ended May 19. The average of new claims over the past four weeks, meanwhile, dropped by 5,500 to 370,000, the lowest level in six weeks. Continuing claims also decreased.

Also this morning, the Federal Deposit Insurance Corp said bank profits continued to grow during Q1, reaching their best levels since the second quarter of 2007, according to the FDIC's quarterly banking report. Q1 bank net income was $35.3 billion, up by $6.6 billion from the year-ago quarter as lower provisions for loan losses contributed to earnings improvements.

In company news, Hewlett-Packard (NYSE:HPQ) finished with a 3% gain after unveiling plans to lay off 27,000 employees and voicing cautious optimism despite a 31% slump in its fiscal Q2 earnings. Despite the big decline for profits, the results beat expectations and the company raised its full-year view.

Pandora (NYSE:P) jumped nearly 12% today after the Internet radio firm reported a $0.12 a share net loss that was narrower than the $0.20 a share loss forecast by most analysts. Sales also topped Wall Street expectations.

But jewelers had a rough day, with shares of Tiffany's (NYSE:TIF) and Signet Jewelers Ltd (NYSE:SIG) sliding after both firms reduced their guidance for future quarters. TIF is off over 9% after the high-end retailer lowered its 2012 EPS view to $3.70 to $3.80, below the $3.97 a share consensus call of analysts. Management previously expected earnings of between $3.95 to $4.05 a share.

Q1 earnings at TIF also trailed forecasts after growing only 0.6% during the period as slowing economic growth in many countries and softness in its U.S. operations kept revenue growth below expectations.

Signet shares are down 8.5% after the jewelers' Q1 revenue missed expectations and the company provided Q2 earnings guidance below the Street view. SIG projects earnings per share of between $0.78 and $0.84 during the current quarter, below the $0.90 a share that analysts polled by Thomson Reuters, on average, are expecting.

Commodities were mostly higher. July crude closed $0.83 higher at $90.63, June natural gas fell 9 cents to $2.65. June gold rose $8.50 to finish at $1556.70, July silver rose $0.63 to $28.12, while July copper rose 1 cent to $3.42.

UPSIDE MOVERS

(+) VSEC, Wins 10-year, NIH contract worth up to $20 billion.

(+) PVH, Q1 earnings jump 61%; strong growth for Calvin Klein, Tommy Hilfiger brands.

(+) SNPS, Q2 earnings fell 74% due to acquisition-related charges.

(+) HRB, Names Gregory Macfarlane as new CFO.

(+) AFCE, Q1 EPS of $0.35 beats by $0.04; Revenues also top estimates, raises guidance.

DOWNSIDE MOVERS

(-) NTAP, Issues bleak guidance, overshadowing 13% Q4 earnings growth.

(-) MNRO, Q4 profit rises 27% but trails expectations.

(-) HAS, Pushes back theatrical release for next "G.I. Joe" movie by nine months.

(-) RJF, Assets under administration rose to $376 billion in April.

Source: Stocks Manage Rebound After Early Losses