Stocks surge after fall in jobless
A drop in unemployment claims and an upbeat forecast from Cisco Systems Inc. gave investors a jolt of confidence a day before a key government report on jobs.
The Dow Jones industrial average jumped 200 points to its first close above 10,000 for two weeks.
The Dow rose 203.82, or 2.1%, to close on Thursday at 10,005.96, its first close above the psychological 10,000 mark since October 22.
The broader Standard & Poor's 500 index rose 20.13, or 1.9%, to 1,066.63, while the Nasdaq rose 49.80, or 2.4%, to 2,105.32.
The Nasdaq led major indexes after Cisco, the maker of computer-networking gear, predicted its revenue would grow.
The Labour Department said the number of newly laid-off workers seeking unemployment benefits fell to 512,000 last week, the lowest level since January and fewer than economists had forecast. Initial claims are considered a gauge of the pace of layoffs.
The report unleashed a wave of optimism about the government's monthly report on employment due on Friday, which will shape trading because of the ties between joblessness and consumer spending. Economists believe spending must increase for the economy to mount a sustained recovery. Analysts project that the unemployment rate rose to 9.9% in October.
The biggest jump in productivity in six years fanned hopes that lower costs will boost corporate profits. The report also illustrated, though, that many employers remain reluctant to hire. The government said the amount of output per hour worked rose 9.5% in the July-September quarter.
Meanwhile, retailers posted sales gains for the second straight month in October after watching business slide for more than a year. The retail industry posted a 2.1% sales gain for October, according to an International Council of Shopping Centers-Goldman Sachs tally. Investors are looking for any sign that consumers are willing to spend more as the holiday shopping season approaches.
"The news coming in has been for the most part better than expected," said Mike Boyle, senior vice president and portfolio manager at Advisors Asset Management.
Press Association
