US STOCKS closed higher

After a sluggish start, stocks were firmly higher Thursday afternoon, with the S&P 500 in striking distance of a new high.

Today's economic data featured weekly initial claims, the Existing Home Sales report for April, and April Leading Indicators:

Weekly initial claims increased from 298,000 to 326,000, while the consensus expected a reading of 305,000.

Existing home sales increased a modest 1.3% in April after three consecutive months of sales declines. Still, sales are down 6.8% from April 2013.

The Leading Indicators report for April increased 0.4%. That followed a revised 1.0% increase in March, and was below the consensus estimate, which called for an increase of 0.5%.

Utilities and health care have narrowed their gains to 0.8% and 0.7%, respectively, but that has had little impact on the broader market as technology (+0.5%) overtook the S&P 500 after underperforming through the first half of the session.

H-P was up 1.5% ahead of the Palo Alto, Calif.-based company’s quarterly report due after the closing bell. 

Facebook was up 1% after Evercore Partners raised its rating for the social network to overweight.

Shares of RetailMeNot, a provider of online coupons, sank 20.33% on a report that changes to a Google search algorithm caused a sharp drop in the company's online traffic. 

Reynolds American (-1.07%) and Lorillard (-2.11%) are reportedly in talks to join forces and create the second largest U.S. tobacco company. Lorillard, which makes the e-cigarette blu, would give Reynolds access to the growing market for electronic cigarettes. A deal could also benefit U.K.-based British American Tobacco (BTAFF), which owns a large stake in Reynolds. 

McDonald's (-0.07%) is also a focus as the fast-food operator holds its annual shareholder meeting in Oak Brook, Illinois.

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