* U.S. manufacturing gains offset weak overseas data
* Investors see potential stock gains despite U.S. budget
* Chesapeake shares off after SEC escalates investigation
* Groupon rallies after chief executive exits
* Indexes up: Dow 0.3 pct, S&P 0.2 pct, Nasdaq 0.2 pct
By Rodrigo Campos
NEW YORK, March 1 (Reuters) - U.S. stocks edged higher on
Friday as strong economic figures more than offset growth
concerns out of China and Europe and as investors shrugged off
expected across-the-board U.S. goverment spending cuts.
Stocks opened sharply lower as Asian factories slowed and
European output fell, but most of the losses disappeared after a
report showed U.S. manufacturing activity expanded last month at
its fastest clip in 20 months.
U.S. consumer confidence also rose in February as Americans
turned more optimistic about the job market.
With government budget cuts set to begin on Friday,
President Barack Obama blamed Republicans for failure to reach a
compromise to avert the cuts, known as sequester.
Investors, who have had plenty of time to
prepare, appeared not too worried about the immediate impact.
"Despite the headlines, the drama and the finger pointing,
the U.S. economy can still expand and as long as you see
expansion, (equity) markets can go higher," said Quincy Krosby,
market strategist at Prudential Financial in Newark, New Jersey.
Krosby said the market was also looking ahead to next week's
government payrolls report. A stronger jobs market points to
stronger consumer spending, an important component for economic
growth. Separately, a government report on Friday said consumer
spending rose in January as Americans spent more on services.
The Dow Jones industrial average rose 38.09 points or
0.27 percent, to 14,092.58, the S&P 500 gained 3.4 points
or 0.22 percent, to 1,518.08 and the Nasdaq Composite
added 7.68 points or 0.24 percent, to 3,167.87.
For the week so far, the Dow is up 0.7 percent while the
Nasdaq and S&P are up 0.2 percent.
Equities continue to attract investors in an environment of
low interest rates due to an accommodative monetary policy. The
Dow is less than 1 percent away from its all-time intraday high
of 14,198.10. Declines have been shallow and short-lived, with
investors jumping in to buy on dips.
Intuitive Surgical jumped 8.3 percent to $552.18
after Cantor Fitzgerald analyst Jeremy Feffer upgraded the
stock, saying the more than 11 percent slide in the stock on
Thursday was a gross overreaction to a news report.
Groupon Inc surged 9 percent to $4.94 a day after
the online coupon company fired its chief executive officer in
the wake of weak quarterly results.
Gap Inc rose 2.7 percent to $33.81 after reporting
fourth-quarter earnings that beat expectations and boosting its
dividend by 20 percent, while Salesforce.com Inc posted
sales that beat forecasts, sending shares up 7.2 percent to
Chesapeake Energy Corp fell 1.7 percent to $19.81
after the U.S. Securities and Exchange Commission escalated its
investigation into the company and its Chief Executive Aubrey
McClendon for a controversial perk that granted him a share in
each of the natural gas producer's wells.