* S&P 500 has gained 1.9 percent over past two sessions
* Q4 GDP revised to show growth, but less than expected
* J.C. Penney, Groupon both sink on weak revenue
* Dow up 0.2 pct, S&P up 0.3 pct, Nasdaq up 0.4 pct
By Ryan Vlastelica
NEW YORK, Feb 28 (Reuters) - U.S. stocks edged higher on
Thursday, pointing to a third straight day of gains in the wake
of some strong economic data, though a further advance may be
limited with major averages near multi-year highs.
While some data released Thursday were rosy, a read on
economic growth was weaker than expected, and analysts said a
pullback may be in store a day after major equity indexes posted
their biggest daily advance since early January.
Over the past two sessions, the S&P 500 has gained 1.9
percent, rising back above the closely watched level of 1,500.
The Dow Jones industrial average moved within striking distance
of an all-time high.
"The market is looking choppy, and I think investors should
use this as an opportunity to sell into strength," said Matt
McCormick, a money manager at Cincinnati-based Bahl & Gaynor.
"This seems like an environment where someone should be
conservative instead of aggressive."
The U.S. economy grew 0.1 percent in the fourth quarter, a
weaker pace than expected, although a slightly better
performance in exports and fewer imports led the government to
scratch an earlier estimate of an economic contraction.
Separately, the number of Americans filing new claims for
unemployment benefits fell more than expected last week, while
the February Chicago Purchasing Managers Index unexpectedly rose
to an 11-month high.
While equity markets suffered steep losses earlier in the
week on concerns over European debt, they have since recovered,
with the gains fueled by strong data and recent comments by
Federal Reserve Chairman Ben Bernanke that showed continued
support for the Fed's economic stimulus policy.
"Growth is still anemic and there are still issues with
Europe. People seem to be ignoring the signs that would
otherwise give them cause for concern," said McCormick, who
helps oversee $8.2 billion in assets.
The Dow Jones industrial average was up 27.27 points,
or 0.19 percent, at 14,102.64. The Standard & Poor's 500 Index
was up 5.13 points, or 0.34 percent, at 1,521.12. The
Nasdaq Composite Index was up 13.75 points, or 0.43
percent, at 3,176.01.
The benchmark S&P 500 has gained 1.4 percent in February,
the Dow is up 1.7 percent and the Nasdaq has added 1 percent.
J.C. Penney Co Inc slumped 18 percent to $17.32 as
the S&P's biggest decliner after the department store reported a
steep drop in sales on Wednesday. Groupon Inc also
slumped on weak revenue, with the stock off 25 percent at $4.50.
Mylan Inc jumped 6.5 percent to $30.45 on the Nasdaq
after the generic drugmaker posted a 25 percent rise in
Investors were keeping an eye on the debate in Washington
over sequestration - U.S. government budget cuts that will take
effect starting on Friday if lawmakers fail to reach an
agreement on spending and taxes. President Barack Obama and
Republican congressional leaders arranged to hold last-ditch
talks to prevent the cuts, but expectations were low that any
deal would be produced.
With 93 percent of the S&P 500 companies having reported
results so far, 69.5 percent have beaten profit expectations,
compared with a 62 percent average since 1994 and 65 percent
over the past four quarters, according to Thomson Reuters data.
Fourth-quarter earnings for S&P 500 companies are estimated
to have risen 6.2 percent, according to the data, above a 1.9
percent forecast at the start of the earnings season.