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Stocks move higher on Wall Street as unemployment claims drop to lowest since March 2008
NEW YORK (AP) ' Stocks edged higher on Wall Street early Thursday on several encouraging reports about the U.S. economy, including a drop in claims for unemployment benefits. Continuing uncertainty about Greece's debt problems kept the gains in check.
The Dow Jones industrial average was up 54 points to 12,834 shortly after 10 a.m. Dow futures had been lower before the market opened on fears that Greece's latest bailout package could fall apart.
The broader Standard & Poor's 500 was up 4 at 1,347 and the Nasdaq composite was up 11 points at 2,926.
The Labor Department said weekly applications for unemployment benefits dropped for the fourth time in five weeks, reaching their lowest point since March 2008. The agency also said one broad measure of wholesale inflation came in lower than expected last month.
The stronger reading on the U.S. jobs market led traders to sell Treasury bonds, pushing yields lower. The yield on the 10-year Treasury note, a common benchmark for lending to consumers and businesses, rose to 1.95 percent from 1.93 percent late Wednesday.
European markets did not fare as well. Major indexes in France, the U.K., Germany and Spain slid on worries over whether Greece will secure a bailout. However, the ATHEX index in Greece climbed 0.5 percent.
As it has for weeks, deal-making on bailing out Greece dawdled on without any real clarity. Greece is trying to negotiate with its lenders, including the 16 other countries that use the euro, for breaks on some of its loans coming due next month.
Some of the lenders, including richer euro zone countries like Germany, have complained that Greece hasn't lived up to previous commitments to cut spending, a hard task in a country where citizens have grown used to extravagant government spending. There are also concerns that the second, '130 billion bailout currently being negotiated wouldn't be enough to lift Greece out of its steep recession anyway, which could make Germany and other countries less likely to sign off on it.
If Greece doesn't get the bailout, it will default on loans due next month and could be forced to leave the euro. Some richer euro zone countries now seem to think that such an outcome wouldn't be such a bad outcome after all.
Greek Finance Minister Evangelos Venizolos told the country's president, Karolos Papoulias, that there were "many in the euro zone who don't want us any more." Meanwhile Germany's finance minister, Wolfgang Schaueble told German radio he's "not sure even now whether all in the political parties in Greece are aware of their responsibility for the difficult situation of their country."
European stocks and the euro fell and borrowing rates rose for Italy and Spain, a sign that investors are worried that the two countries would be dragged back into a crisis that had shown some signs of easing. Portugal, another troubled euro zone country, reported 14 percent unemployment, the highest on record.
U.S. financials fell slightly after Moody's said it may lower the ratings of some of the world's largest banks, including U.S heavyweights Citigroup, Bank of America, JPMorgan Chase, Goldman Sachs and Morgan Stanley, because stricter regulations and a struggling economy will crimp their long-term prospects for growth.
In other stocks making big moves:
' General Motors rose 4 percent, boosted by news that it had earned its highest profit ever in 2011, just two years after the auto giant teetered near collapse and had to be rescued by taxpayer money. The profit masked some troubling statistics, including losses in Europe and South America, but investors didn't seem to mind.
' Jam maker J.M. Smucker plummeted 9 percent after the company missed analysts' estimates for net income and revenue.