(Updates to close)
* Stocks make comeback as oil retreats
* Deal news in utilities sector buoys optimism
* Bank stocks rebound on bargain hunting
By Kristina Cooke
NEW YORK, May 22 (Reuters) - U.S. stocks rose modestly on
Thursday after two days of steep declines as energy prices
pulled back from record highs and a proposed acquisition in the
utilities sector buoyed optimism.
Power producer Calpine Corp <CPN.N> rose more than 8
percent a day after NRG Energy Inc <NRG.N> made an unsolicited
bid to buy the company for about $11 billion.
An index of utility stocks <.GSPU> rose 0.5 percent.
Analysts said the recent uptick in M&A activity was supportive
of stocks.
Oil prices retreated from yet another record high hit
earlier on Thursday, helping an index of airline shares, which
are especially sensitive to fuel prices, to rise 0.7 percent
after a 10 percent plunge a day earlier.
The bargain hunting also extended to financial stocks after
recent declines on the growing belief that the Federal Reserve
is done cutting interest rates. The S&P financials sub-index
<.GSPF> rose 0.9 percent.
"Oil has been doing its gyrations back and forth, but it's
good news that it's pulling back a bit now. But yesterday was a
very damaging day," said Joe Saluzzi, co-manager of trading at
Themis Trading in Chatham, New Jersey. The Dow Jones industrial
average <> fell more than 220 points on Wednesday.
On Thursday the Dow rose 24.43 points, or 0.19 percent, to
close at 12,625.62. The Standard & Poor's 500 Index <.SPX>
climbed 3.64 points, or 0.26 percent, to 1,394.35, while the
Nasdaq Composite Index <> was up 16.31 points, or 0.67
percent, at 2,464.58.
In positive news about the economy, the Labor Department
reported weekly jobless claims fell by 9,000 to the lowest
level in a month.
Calpine shares rose to $23 while NRG stock fell 5.1 percent
to $40.35.
Ford Motor Co <F.N> shares were a drag after the automaker
abandoned its profitability goal for 2009. The stock fell 8.2
percent to $7.16 on the NYSE.
JPMorgan Chase & Co <JPM.N> shares rose 1.5 percent to
$43.05 percent and Citigroup Inc <C.N> gained 3.1 percent to
$21.72.
Children's Place Retail Stores Inc <PLCE.O> reported higher
quarterly profit on increased sales, sending its shares 16.3
percent higher to $32.98.
Trading volume was low on the New York Stock Exchange, with
about 1.2 billion shares changing hands, below last year's
estimated daily average of 1.9 billion, while on Nasdaq about
1.9 billion shares traded, also short of last year's daily
average of 2.17 billion.
Advancing stocks outnumbered decliners on the NYSE by 17 to
14 and by 17 to 11 on Nasdaq.
(Editing by Kenneth Barry)
