Wall Street Moves Higher as Biotech Stocks Rally

The stock market rose on Thursday, led by gains in small-capitalization stocks, while the Nasdaq advanced on a rally in biotechnology shares.

The Dow Jones industrial average rose 10.02 points, or 0.06 percent, to close at 16,543.08. The Standard & Poors 500-stock index gained 4.46 points, or 0.24 percent, to 1,892.49. The Nasdaq composite added 22.81 points or 0.55 percent, to 4,154.34.

Housing stocks also ranked among the market's best performers after existing home sales rebounded in April.

"Small-caps and momentum names are doing good today, but we really need another solid gain in the overall market for those high growth-oriented, high-risk stocks" to move away from the day-to-day volatile trading, said Tim Ghriskey, chief investment officer of the Solaris Group.

Among momentum stocks, Vertex Pharmaceuticals rose 6 percent, while Alexion Pharma gained 2.5 percent.

The S.&P. 500 is roughly 0.5 percent shy of its record intraday high set on May 13, but investors have been reluctant to push equities higher as economic data has cast doubt on the pace of the economic recovery.

"We have been in a two steps forward, one step back progression on the domestic economy, and that can be extended to the global economy as well," said Jim Russell, senior investment strategist at U.S. Bank Wealth Managementi.

"We would characterize the rebound out of the weather-inhibited first quarter as a bit disappointing," Mr. Russell said. "We were looking for perhaps a bit more growth by mid to late May than what we are seeing."

Homebuilders were among the S.&P. 500's bigger gainers, with D.R. Horton up 2.4 percent and PulteGroup up 2.2 percent.

Best Buy rose 3.4 percent after the electronics retailer reported first-quarter earnings that topped expectations, but its revenue fell short of forecasts as domestic comparable store sales fell 1.3 percent.

Sears Holdings jumped 4.2 percent even though it posted a bigger loss for the first quarter as the struggling retailer failed to arrest a fall in sales.

Dollar Tree jumped 6.6 percent, the best performer on the S.&P. 500, after posting first-quarter results and providing an outlook for the second quarter and full year.

The financial data firm Markit said its preliminary or "flash" Manufacturing Purchasing Mangers Index rose to 56.2 in May, stronger than the expected reading of 55.5. Factory output growth hit its fastest pace since February 2011.

Reynolds American fell 2.1 percent following reports that was in active discussions to buy Lorillard in a complicated, three-way transaction that could see British American Tobacco take a major role to back a potential merger. Lorillard fell 5 percent.

Marathon Petroleum fell 0.9 percent after it n said it would buy the retail business of Hess for about $2.87 billion. Hess gained 1.1 percent.

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