By Rita Nazareth March 18 (Bloomberg) -- U.S. stocks fluctuated as a drop in jobless claims and no change in consumer prices added to evidence the economy is recovering without stoking inflation, while FedEx Corp. slid on earnings that disappointed investors. DuPont Co. and Alcoa Inc. led gains in Dow Jones Industrial Average stocks after government reports showed initial unemployment claims dropped by 5,000 last week and the consumer price index was unchanged. Nike Inc. climbed 4.9 percent after saying profit more than doubled, while FedEx slipped as quarterly results rose less than some analyst estimated. The Standard & Poor’s 500 Index slipped less than 0.1 percent to 1,165.63 at 10:08 a.m. in New York. The Dow gained 15.87 points, or 0.2 percent, to 10,749.54 after closing at the highest level since October 2008 yesterday. “Both CPI and jobless claims figures were very comforting,” said Stanley Nabi, New York-based vice chairman of Silvercrest Asset Management Group, which oversees $8.5 billion. “We’re seeing economic growth and that doesn’t seem to raise any flags of inflation. Therefore, interest-rates should be low for a while, which is good for the stock market. We’ve been recently watching tiny moves though, due to the good run we’ve had over the past 12 months.” 17-Month High The S&P 500 climbed for a third straight day yesterday to extend its rally from a 12-year low last March to 72 percent. The index rose to the highest intraday level since Sept. 29, 2008, when the U.S. House of Representatives rejected a version of the $700 billion financial rescue package. The index plunged 8.8 percent that day, its biggest slide since the market crash of 1987. Benchmark indexes briefly headed higher after gauges of leading economic indicators and Philadelphia manufacturing showed expansion. Nike climbed 4.9 percent to $74.38. The world’s largest maker of athletic shoes said third-quarter profit more than doubled, beating analysts’ estimates, as North America posted a sales increase for the first time in a year. FedEx slipped as much as 2.8 percent to $89.19. Net income for the three months ended Feb. 28 rose to $239 million, or 76 cents a share, Memphis, Tennessee-based FedEx said today in a statement. The company was projected to earn 73 cents a share, the average of 18 estimates compiled by Bloomberg. At least five analysts said in the past two weeks that FedEx may exceed their estimates or the Wall Street consensus. GameStop Corp. gained 8.9 percent to $21.63. The world’s largest video-game retailer reported fourth-quarter earnings per share of $1.29. Analysts estimated $1.28 a share, based on the average estimate from a Bloomberg survey. Guess, Broadcom Guess? Inc. climbed 2.9 percent to $48.03. The clothing maker reported fourth-quarter profit that topped analysts’ estimates and said it will boost its dividend by 28 percent to 16 cents a share. Broadcom Corp. advanced 1.8 percent to $34.22. The maker of semiconductors for wireless headsets and television set-top boxes was upgraded to “buy” from “neutral” at Goldman Sachs Group Inc. Burger King Holdings Inc. advanced 2.6 percent to $20.69. The second-largest U.S. hamburger seller was raised to “buy” from “hold” at Deutsche Bank AG. Caterpillar Inc. fell 0.6 percent to $59.89. The world’s largest maker of construction equipment reported its rolling three-month global retail sales for its machinery and engines line of business was down 20 percent. The information was disclosed in a regulatory filing. Athenahealth Inc. dropped 2.7 percent to $39.43. The provider of Internet-based business services for medical practices was downgraded to “underperform” from “market perform” at Oppenheimer & Co. Bullish Signals The Dow Jones Industrial Average yesterday rose above the midpoint of its last bull market in a positive sign for U.S. stocks, according to Richard Russell, who has studied the average since 1958. The advance by the 30-stock Dow also was a bullish signal for followers of Dow Theory, which holds that moves by the Dow Jones Transportation Average must be “confirmed” by the industrial average, and vice versa, in order to be sustained. A close by the Dow above the midpoint is “a big positive for equities,” Russell, the 85-year-old editor of Dow Theory Letters, said in a telephone interview yesterday. “I would probably turn somewhat bullish.” To contact the reporter on this story: Rita Nazareth in New York at rnazareth@bloomberg.net.

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