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Stock open higher on drop in jobless claims
NEW YORK (AP) — Stocks rose sharply in early trading Wednesday after a batch of economic reports offered some hope that the U.S. economy was improving.
Investors siezed on encouraging readings on the labor market and Americans' incomes while shrugging off a steep fall in new home sales and manufacturing orders.
The upturn marked an abrupt reversal from Tuesday, when an exchange of artillary fire between North and South Korea led nervous investors to sell stocks and dash into gold, Treasurys and other assets often used as hiding spots.
The government said first-time claims for unemployment benefits fell 34,000 to 407,000 last week. That was much better than the 435,000 new claims economists had expected.
A separate report showed that Americans' incomes rose 0.5 percent last month, slightly better than expected. Their spending rose 0.4 percent, up slightly from September.
The Dow Jones industrial average rose 133, or 1.19 percent, to 11,167, in morning trading.
The Standard & Poor's 500 index gained 14, or 1.27 percent, to 1,195. The Nasdaq composite index rose 44, or 1.77 percent, to 2,539.
Safety assets moved lower as investors became more willing to take on risk. The dollar and gold both fell, while Treasury prices edged lower, pushing their yields higher. The yield on the 10-year note inched up to 2.85 percent from 2.77 percent Tuesday.
Investors shrugged off slightly downbeat reports showing declines in sales of manufactured goods and new home sales. Orders for durable goods fell 3.3 percent, while new home sales and median home prices both fell last month. Sales of single-family houses slid 8.1 percent, the fourth time the rate has dropped in the past six months.
European stock markets rose. The Euro Stoxx 50, which tracks the shares of blue-chip companies in countries that use the euro, rose 0.6 percent.
In corporate news, the world's largest maker of farm equipment reported earnings that beat estimates. Deere & Co. posted a $457.2 million profit in the quarter ending Oct. 31, compared with a loss a year earlier. Tiffany & Co. also reported a rise in profit, fueled by strong sales of jewelry in the U.S. and overseas.
U.S. stock and bond markets will be closed Thursday for the Thanksgiving holiday. They will reopen for half-day sessions on Friday.
By Donald Lambro
Growth spikes are little more than trend-free anomalies
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Let it snow