U.S. Markets Close Higher Thursday Despite Poor Economic Data

New York, NY (AHN) - U.S. markets opened lower Thursday after inflation data showed an unexpected increase in July. However, all three major indices were able to rally as oil slid and financials rebounded.

The Labor Department reported a 0.8 percent increase in July consumer prices, roughly double what economists had expected. The increase puts the current rate of inflation at a 17-year high.

Initial jobless claims data was reported shortly after the open. Weekly claims fell 10,000 for the week ending Aug. 9; however, the four week moving average rose 19,000 to 440,500.

Weakness seeped back into the oil market. The price of crude fell 99 cents to settle at $115.01 a barrel on the New York Stock Exchange.

The Dow Jones Industrial average rose 83 points or 0.7 percent on Thursday. General Motors was the strongest component, up 10 percent on news that the automaker will have an electric car on the market by 2010.

The S&P 500 added 7 points or 0.55 percent as the retail sector rose 2.1 percent with strength coming from a positive earnings report out of Wal-Mart. The world's largest retailer said earnings grew 17 percent in the second quarter, topping market expectations.

The Nasdaq Composite continues to act stronger than the other major averages, gaining 25 points or 1 percent on Thursday. Big-cap tech stocks provided strength on the session as the Nasdaq 100 rose 1 percent. Research in Motion was the leader of the group, adding 3 percent to $130.37.

In other financial news, Morgan Stanley and JP Morgan reached a settlement with New York State Attorney General Andrew Cuomo in regard to their auction-rate securities investigation. Both bank will pay fines upwards of $35 million and repurchase a combined $7 billion in the securities.

Friday's session will see a preliminary Michigan Consumer Sentiment reading for August.