NEW YORK, Mar. 18 -- U.S. stocks rebounded on positive economic reports on Thursday, a day after the Standard & Poor's 500 Index and the Nasdaq erased most of gains in 2011.
After the big sell-off, stocks opened higher on Thursday with the natural resource shares leading the market as commodity prices rebounded. During the whole trading day, the market remained positive despite Japan's situation.
On economic front, the Labor Department said Thursday that the Consumer Price Index rose 0.5 percent in February. The figure was the largest increase since June 2009.
Excluding food and energy costs, core prices rose 0.2 percent. Gas prices jumped 4.7 percent in February. Food costs increased 0. 6 percent, the most in two and a half years.
Costs for other goods and services, such as health care and cars, were rising as well. Core consumer prices increased 1.1 percent in the past year.
Meanwhile, the Philadelphia Federal Reserve Bank said that manufacturing activity in the mid-Atlantic region increased for the fourth consecutive month in March.
The bank's monthly survey of businesses showed the leading diffusion index rose from 35.9 in February to 43.4. The index for new orders jumped 17 points to 40.3. The average employee work week index increased from 12.8 to 13.2.
Also according to the Labor Department, initial claims for state unemployment benefits fell 16,000 to a seasonally adjusted 385,000.
The reading dropped as expected last week, with the four-week moving average dropping to its lowest level in more than two and a half years. Investors believed that it suggested a strengthening labor market.
The Federal Reserve on Tuesday said that the economy was on " firmer footing" with the labor market improving gradually. It also dropped a reference it had used in a statement in January to employers remaining reluctant to add to payrolls.
The Dow Jones industrial average jumped 161.29 points, or 1.39 percent, to 11,774.59. The Standard & Poor's 500 Index gained 16. 84 points, or 1.34 percent, to 1,273.72. The Nasdaq increased 19. 23 points, or 0.73 percent, to 2,636.05.
