UPDATED:
Wall Street posted major gains Thursday following upbeat reports on unemployment, productivity and consumer spending.
At the close, the Dow Jones Industrial Average was up 203.82 points, or 2.1 percent, to 10,005.96, its first close above the psychological 10,000 mark since Oct. 22. The broader Standard & Poor’s 500 index rose 20.13, or 1.9 percent, to 1,066.63, while the Nasdaq rose 49.80, or 2.4 percent, to 2,105.32.
The rally follows a Labor Department report showing the lowest number of people in the past 10 months filing first-time unemployment claims.
Initial claims for the week ending Oct. 31 fell to 512,000, roughly 20,000 fewer than the previous week.
In addition, continuing claims for the week ending Oct. 24 totaled 5.75 million, 68,000 fewer than the previous week.
Economists look at initial claims to gauge the pace of layoffs and whether employers are rehiring.
The U.S. unemployment rate is now at 9.8 percent — a 26-year high. The October number is set for release Friday, and analysts expect it to keep climbing to 9.9 percent or more. Some analysts think the numbers Thursday are a sign companies soon will rehire as the economy recovers from the recession, but others are less upbeat.
“Ten percent is surely possible and likely for November,” said Peter Morici, a professor at the University of Maryland’s Robert H. Smith School of Business. “Unemployment would have already pierced 10 percent had not so many adults quit looking for work and left the labor force in recent months.”
The Labor Department also reported Thursday that U.S. productivity increased by 9.5 percent in the third quarter. The number marked the biggest increase in six years and indicated that companies are getting more output from workers still on the job.
Some economists think that situation soon will force companies to start rehiring.
The upbeat news on consumer spending came from some of the country’s biggest retailers, including high-end merchants Saks Inc. and Nordstrom Inc., which reported surprising sales gains in October.
Gap Inc. and Costco Wholesale Corp. reported solid gains for the month.
According to data compiled by the International Council of Shopping Centers and Goldman Sachs, overall sales at stores open at least a year rose 2.1 percent last month, compared with a 4.2 percent drop in October 2008.
Analysts attributed the increases in part to a cool fall, which spurred sales of boots and apparel, and said the numbers are an encouraging sign amid earlier downbeat forecasts of a slow holiday shopping season.
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