NEW YORK (AP) — Encouraging news about the job market and higher profits from CBS, Facebook and other companies lifted stocks Thursday.
Signs of increased hiring have supported this year’s surge in stocks and pushed the market to record highs, but the run-up has started to falter in recent weeks on concerns that the global economy is slowing.
The Dow Jones industrial average was up 124 points to 14,822 as of 1:53 p.m. EDT, an increase of 0.8 percent. It lost 138 points on Wednesday, its worst drop in two weeks. The Standard & Poor’s 500 index climbed 15 points, or 1 percent, to 1,598.
The Labor Department reported that applications for unemployment benefits fell last week to the lowest since January 2008. The decline suggests layoffs are easing. It’s a positive sign ahead of the government’s closely watched monthly employment report due out on Friday. Stocks fell April 5 after the government reported that hiring in March was the weakest in nine months.
“Everyone is looking to the April jobs numbers,” said Tyler Vernon, chief investment officer at Biltmore Capital. “People are more confident that it was an anomaly last month and are looking for some bigger numbers.”
Economists forecast that the economy added 160,000 jobs last month. That’s much better than the 88,000 added in March but below last year’s pace of nearly 185,000 per month.
Investors were also watching earnings on Thursday.
General Motors rose $1.21, or 4 percent, to $31.39 after it lost less money in Europe and beat Wall Street’s expectations for first quarter profit. The automaker’s earnings of 67 cents a share beat the 54 cents predicted by Wall Street analysts who follow the company.
Broadcaster CBS reported a 22 percent jump in first-quarter earnings as big events such as the Super Bowl pushed advertising revenue higher. Its stock rose $1.19, or 2.6 percent, to $47.59.
Facebook gained $1.47, or 5.4 percent, to $28.91 after its first-quarter revenue rose 38 percent, surpassing Wall Street expectations. Nearly a third of the company’s advertising revenue came from mobile devices, a greater share than analysts were expecting.
The social networking site bucked the trend for companies reporting in the first quarter. Most corporations are exceeding analysts’ expectations on earnings but falling short on revenue.
“If we continue to see several more quarters like this, investors would start to get nervous,” said Andrew Milligan, head of global strategy at Standard Life investment. He said that growth needs to pick up in the major export markets, such as China and Europe, for U.S. companies to maintain earnings growth.
Earnings at companies in the S&P 500 are at record levels. They are forecast to rise by 4.4 percent in the first quarter and keep rising throughout the year, according to S&P Capital IQ data.
Information technology stocks rose the most of the 10 industry groups in the Standard & Poor’s 500 index, advancing 1.5 percent. The industry group has surged in the past two weeks, after lagging the S&P 500. Its 5.8 percent increase for the year still trails the 18.6 percent gain for health care companies, the best performer in the index.
Seagate Technology, a maker of hard drives, jumped $2.86, or 7.7 percent, to $39.82 even after the company reported a slump in sales and earnings. The decline wasn’t as bad as analysts had expected, however, and Seagate handily beat estimates for both sales and revenue.
Gains for technology companies helped push the technology-heavy Nasdaq composite higher. The index advanced 43 points, or 1.3 percent, to 3,343.
Stock are rebounding after a slump Wednesday, when reports of slower manufacturing growth and hiring dragged down markets.
In government bond trading, the yield on the 10-year note rose to 1.64 percent after falling to a low for the year of 1.63 percent Wednesday. Stocks fell even after the Federal Reserve reaffirmed its plan to continue its aggressive stimulus program, which is now five years old.
The price of crude oil rose $2.20 to $93.31 a barrel, up 2.5 percent. The price of gold rose $21.40, or 1.5 percent, to $1.467.60 an ounce. The U.S. dollar gained against the euro after the European Central Bank cuts its benchmark interest rate a quarter of a percentage point to 0.5 percent. The euro fell a penny against the dollar to $1.3066.