MARKET SNAPSHOT: U.S. Stocks Climb; S&P 500 Hits Intraday Record

By Anora Mahmudova, MarketWatch

NEW YORK (MarketWatch) -- The U.S. stock market resumed an upward trend on Thursday after a pause the day before, sending the benchmark S&P 500 to an intraday record in early trade.

Investors shrugged off revisions to the first-quarter GDP data showing the economy contracted 1% and focused instead on better-than-expected jobless claims figures, pointing to continued improvement in the labor market and deal news surrounding Hillshire Brands Co.

The S&P 500 (SPX) added 5 points, or 0.3%, to 1,915.15, topping its previous intraday record reached on Tuesday.

The Dow Jones Industrial Average (DJI) gained 29 points, or 0.2%, to 16,658.84.

The Nasdaq Composite (RIXF) rose 17 points, or 0.4%, to 4,242.16.

Follow MarketWatch's live blog of today's stock-market action.

In data news, the U.S. economy contracted in the first quarter for the first time in three years, hampered by harsh weather that disrupted business operations and slowed construction, according to newly revised government figures.

Separately, the number of people applying for U.S. unemployment benefits sank last week to the second-lowest level since the recession ended in mid-2009, suggesting continued improvement in a labor market that's perked up in the early spring.

Also on the data calendar Thursday, pending home-sales data for April will be released at 10 a.m. Eastern Time. In March, that indicator rose 3.4%.

In corporate news, Hillshire Brands Co. (HSH) soared 15% after Tyson Foods Inc. (TSN) offered to buy the maker of Jimmy Dean sausage for $50 a share in cash, topping Pilgrim's offer of $45 a share. Tyson Foods shares rose 5.7%, putting it at the leading spot on the S&P 500.

Reporting ahead of the open, Abercrombie & Fitch Co. (ANF) posted a narrower loss than expected and posted first-quarter sales that beat forecasts. Shares rallied 5.7%.

Shares of Palo Alto Networks Inc. (PANW) surged 9.7% after the cybersecurity company late Wednesday reported fiscal third-quarter results that topped Wall Street estimates.

On a more downbeat note, shares of Tilly's Inc. (TLYS) tanked 21% after the retailer on Wednesday forecast second-quarter earnings of 3 cents to 7 cents a share with same-store sales to "decline in the high single digits." Analysts expect second-quarter earnings of 13 cents a share.

Amsurg Corp. (AMSG) shares rallied 8.4% after said it said it will buy Sheridan Healthcare in a cash-and-stock deal valued at $2.35 billion.

In other financial markets, most Asian markets closed in the red, while the European indexes wobbled between gains and losses. Most metals(GCQ4) declined, while oil futures (CLN4) inched lower. The dollar (DXY) fell against most other major currencies.

More news from MarketWatch:

Doom-and-gloom investors led astray by politics

Has Florida found the secret to saving the economy?

Get ready for a major market move

Subscribe to WSJ: http://online.wsj.com?mod=djnwires