MARKET SNAPSHOT: U.S. Stocks Rally To New Highs

By Anora Mahmudova, MarketWatch

NEW YORK (MarketWatch) -- The U.S. stock market rose in early trade, putting the S&P 500 index on track for a possible 48th record close in the past year.

Indexes are on track to finish the week and February with solid gains, as investors shrugged off a sharp cut in the estimate of fourth-quarter U.S. economic growth that nonetheless matched expectations and focused on better-than-expected readings from Chicago PMI and consumer-sentiment reports.

The S&P 500 (SPX) added 9.4 points, or 0.5%, to 1,863.94, hitting a new intraday high. The benchmark index, which turned positive for the year on Thursday, is on track to record solid weekly and monthly gains.

The Dow Jones Industrial Average (DJI) added 85 points, or 0.5%, to 16,357.38. The blue-chip index is also set for weekly and monthly gains.

The Nasdaq Composite (RIXF) added 16.6 points, or 0.4%, to 4,335.6, set to finish the week higher and record the best monthly gain since last September.

"We are clearly in a bull market and this market is not as overbought as it was at the end of last year," says Chris Bouffard, chief investment officer at The Mutual Fund Store.

"With stocks at fair value and the economy still growing, our analysis of overall environment shows that we still have more tail winds to take the markets higher in 2014, albeit with bumps on the way," he added.

Driving the stock market higher were a batch of better-than-expected economic reports.

As expected by the economists polled by MarketWatch, the government on Friday cut its estimate of U.S. growth in the waning months of 2013, mainly because consumers did not spend quite as much as originally reported. The U.S. economy expanded at a 2.4% annual pace in the fourth quarter instead of 3.2% as originally reported.

Chicago PMI accelerated in February, according to the Chicago business barometer released Friday while consumer sentiment rose, according to Friday reports on a gauge from the University of Michigan and Thomson Reuters.

A gauge of pending home sales ticked up 0.1% in January, but remained near a two-year low, signaling that upcoming activity may be slow, the National Association of Realtors reported Friday.

In corporate news, Deckers Outdoor Corp. (DECK) shares dropped 15%. The company, which owns footwear brands such as Ugg and Teva, said it expects full-year earnings to increase about 8%, less than the 12% growth expected by analysts, according to a Thomson Reuters survey. Deckers's projected earnings per share and revenue also disappointed Wall Street.

Jos. A. Bank Clothiers Inc. (JOSB) shares rose 3%. The men's retailer on Thursday rejected the latest offer from rival Men's Wearhouse (MW), which came to $63.50 a share. Jos. A. Bank said it's willing to talk with Men's Wearhouse about a higher price. Shares of Men's Wearhouse rose 5%.

Monster Beverage Corp. (MNST) shares rose 3.6% after the company posted fourth-quarter earnings above estimates.

Salesforce.com Inc.(CRM) shares fell 2% after posting a wider loss for the fourth quarter late Thursday.

In overseas markets, Asia stocks were up slightly overall, although the Japan market logged small declines. The bigger attention was on the Chinese yuan, which had its biggest drop against the dollar in years amid widespread speculation by traders that the People's Bank of China is massively intervening to bring down the value of the currency.

Tensions between Russia and Ukraine remained high on Friday, though markets were calmer over the situation. What investors need to know about Ukraine

European stocks fell after better-than-expected euro-zone inflation data eased pressure on the European Central Bank to cut interest rates next week at its meeting. Gold prices and oil prices were lower after U.S. GDP data.