Stocks turn higher despite weak economic signs

Stocks rose Thursday as investors weighed weak economic reports against strength in second-quarter earnings after a spate of consensus-topping reports from companies such as eBay (EBAY) and IBM (IBM).

The Dow Jones Industrial Average ($INDU) was up 53  points at 12,962. The S&P 500 ($INX) was up 6 points at 1,379. The Nasdaq Composite ($COMPX) was up 29 points at 2,972.

The Labor Department said initial jobless claims for the week ended July 14 rose by 34,000 to 386,000 from the week before, from an upwardly revised 352,000. Economists expected claims to rise to 365,000. The four-week moving average declined by 1,500 to 375,500.

The Conference Board said its index of leading economic indicators fell by 0.3% to 95.6 after rising 0.4% in May. The figure is worse than the expected 0.1% dip, Reuters reported. 

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Sales of existing homes declined in June as fewer people sold their homes under distressed conditions, Reuters reported. The National Association of Realtors said sales fell  by 5.4% to an annual rate of 4.37 million units -- the slowest pace in eight months and well below expectations for a rate of 4.63 million units.

Philadelphia-area manufacturing shrank for the third consecutive month, along with new orders and employment, Bloomberg reported. The Philadelphia Fed's general economic index came in at minus 12.9 in July after a reading minus 16.6 in May, missing economists' expectations for a reading of minus 8. Readings of less than zero signal contraction.

IBM eased past Wall Street's expectations in its earnings Wednesday but fell short on revenue, mainly because of foreign currency pressures. For the full year, IBM lifted its earnings outlook, saying it expects a profit of at least $15.10 a share, up from a prior view of $15 a share and ahead of consensus at $15.06 a share.

Internet giant eBay on Wednesday reported quarterly earnings of 56 cents a share on revenue of $3.39 billion. Analysts were looking for profit of 55 cents a share on revenue of $3.41 billion. EBay saw huge growth in at its PayPal division, which posted a revenue rise of 26% year over year.

Morgan Stanley (MS) posted a second-quarter profit, but its revenue fell by 24% because of a slowdown in trading and deals, Reuters reported. The bank reported earnings of $564 million, or 29 cents per share, compared with a loss of $558 million, or 38 cents per share, a year ago. Revenue fell to $6.95 billion from $9.21 billion a year earlier.

Google (GOOG) is expected to post second-quarter earnings of $10.05 a share on revenue of $8.42 billion after the close. It posted a profit of $10.08 a share on revenue of $8.14 billion in the first quarter and earnings of $8.74 a share on revenue of $6.92 billion in last year's second quarter.

Microsoft (MSFT) also reports quarterly results Thursday, and analysts expect it to post fiscal-fourth-quarte​r earnings of 62 cents a share on revenue of $18.11 billion. The estimates don't take into account a write-down of $6.2 billion related to the 2007 acquisition of aQuantive. The software giant says Windows 8, the upgrade to its operating system, will go on sale Oct. 26. The software is designed to work on both PCs and tablet computers.

The major U.S. equity averages finished with solid gains Wednesday as investors grew more optimistic about second-quarter earnings and as the Federal Reserve said in its Beige Book that the economy continues to grow, albeit more slowly.

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