US STOCKS-Wall St up as data offsets Fed taper concern

* Jobless claims, inflation data support stocks

* Hologic (NasdaqGS: HOLX - news) up on Icahn stake, pares gain on shareholders rights plan

* Target (NYSE: TGT - news) cuts full-year profit forecast

* Indexes up: Dow 0.4 pct, S&P 0.4 pct, Nasdaq 0.7 pct

By Rodrigo Campos

NEW YORK, Nov 21 (Reuters) - U.S. stocks rose on Thursday after data suggested stronger labor market conditions and subdued inflation, making traders reassess the Federal Reserve's latest take on the economy.

The number of Americans filing new claims for unemployment benefits fell more than expected last week and producer prices fell for a second straight month in October, indicating inflation pressures remain benign.

Separate data showed U.S. manufacturing rebounded this month after hitting a one-year low in October and output grew at its fastest pace in nine months.

An indication that the Fed may be ready to start scaling back its $85 billion a month stimulus had weighed on equities Wednesday. But the central bank has repeated it will not taper until the economy can stand on its own and interest rates will remain low well after stimulus is cut back.

"For a long time we have been focused on nothing but the Fed, but the Fed has differentiated well enough between taper and tighten," said Jack de Gan, chief investment officer at Harbor Advisory Corp in Portsmouth, New Hampshire.

"In that environment, good news becomes good news and the market should react strongly to positive economic data and jobs numbers."

The Dow Jones industrial average rose 58.95 points, or 0.37 percent, to 15,959.77, the S&P 500 gained 7.24 points, or 0.41 percent, to 1,788.61 and the Nasdaq Composite added 28.779 points, or 0.73 percent, to 3,950.049.

The S&P 500 closed down for a third straight session on Wednesday, while the Dow touched 16,000 and failed to close above it once more. That level as well as 1,800 on the S&P have provided resistance so far, but a clear climb above them could further entice money managers eager to chase performance.

Target shares fell 4.1 percent to $63.78 after comparable sales rose a smaller than expected 0.9 percent in the third quarter and it lowered its full year profit forecast.

Activist investor Carl Icahn reported a 12.6 percent stake in medical device maker Hologic Inc, prompting the company to adopt a shareholder rights plan to protect itself from hostile takeovers. Hologic shares rose 3.2 percent to $23 after gaining more than 10 percent at one point in premarket trading.

Sears Holdings (NasdaqGS: SHLD - news) , which operates its eponymous department stores and the Kmart discount chain, reported a wider quarterly net loss as sales fell at both chains and it invested in more promotions targeting rewards members. Shares edged up 0.5 percent to $62, reversing a premarket drop.

Abercrombie & Fitch (NYSE: ANF - news) reported a quarterly loss, with comparable-store sales declining for a seventh straight quarter as the apparel retailer struggled with the changing tastes of young shoppers. But its shares added 0.4 percent to $35.13 after having fallen in premarket trading.

Shares of General Motors (NYSE: GM - news) rose 2.4 percent to $38.59 after the U.S. Treasury Department said it expected to sell its remaining GM shares by the end of the year, a plan that may leave taxpayers with a shortfall of about $10 billion on the automaker's 2009 bailout.