Wall Street closes higher

United States stocks rebounded during Thursday's session to close sharply higher, after a report on factory activity came in ahead of expectations.

At the closing bell, the Dow Jones Industrial Average climbed 108.88 points, or 0.67%, to 16,331.05. The S&P 500 advanced 11.24 points, or 0.60%, to 1,872.01, and the Nasdaq Composite Index gained 11.68 points, or 0.27%, to 4,319.29.

Stocks had started the session lower, pressured by worries the Federal Reserve may increase interest rates sooner than expected. Fast-rising interest rates can prompt investors to recalculate positions and potentially trim stocks in favor of higher-yielding bonds.

However, the market turned higher, after data showed that the Philadelphia Federal Reserve's March index of manufacturing activity soundly topped expectations and swung to positive from a month earlier.

Additional economic data were firm, giving credence to the idea that soft reports clouding markets earlier this year reflected cold winter weather rather than a true growth slowdown.

The improving economy should be able to support the stock market, even with the S&P 500 less than 1% below its record high, said Lawrence Creatura, portfolio manager at Federated Investors.

Mr Creatura has been buying shares of home builders, which were bruised by the weather-related economic data, because he believes they are likely to bounce back as the weather improves.

"There has been confusion between economic trends and weather trends," said Mr Creatura, whose firm oversees about $US376 billion. "Weather doesn't just clog the highways, it clogs the economic data, too."

Thursday's data also showed initial claims for jobless benefits in the latest week rose slightly to 320,000 from 315,000 the week before, in line with expectations. The Conference Board's leading economic index for February came in slightly above expectations and US existing-home sales for February slipped 0.4% on the month, as expected.

The S&P 500 fell 0.6% on Wednesday, an abrupt reversal after running up 1.7% in the week's first two sessions. Investors were unsettled after Fed Chairwoman Janet Yellen said in a news conference following a two-day Fed meeting that the central bank could raise rates "something on the order of six months" after it winds down its bond-buying program. That time frame could mean a rate increase as early as April next year, instead of later in 2015, as many had expected.

Ms Yellen spoke after the release of the Fed's official policy statement, which sought to give assurances of continued low rates for an extended period