Stocks rebound as news on the economy improves
NEW YORK — Better economic reports are lifting stocks a day after the market suffered its biggest drop in seven months.
The Labor Department reported Thursday that the number of people applying for unemployment benefits fell more than economists expected last week. Ongoing claims dropped the lowest level since October 2008.
A gauge of manufacturing in the mid-Atlantic region jumped in February to the highest point since January 1984. The survey from the Federal Reserve's Philadelphia branch showed new orders soared.
Production at U.S. factories, mines and utilities dipped last month but was actually higher in previous months than first estimated, according to the Federal Reserve.
The new signals of strength in the U.S. economy allowed investors to put aside fears about Japan's nuclear crisis, if only temporarily.
"It's a reminder that the U.S. economy continues to gain momentum," said Alan Gayle, senior investment strategist at RidgeWorth Investments in Richmond, Va.
"Economic growth leads to more spending, more production and ultimately rising profits," Gayle said. "And at the end of the day, that's what investors buy: rising profits."
FedEx Corp. rose 5 percent. The world's second-largest delivery company said revenue rose 11 percent in the most recent quarter with higher prices, even though profits fell. FedEx said those higher prices may help it beat earnings expectations in the future. United Parcel Service Inc., FedEx's rival, rose 2 percent.
The Dow rose 149, or 1.3 percent, to 11,762.
The Standard & Poor's 500 rose 18, or 1.4 percent, at 1,275. With Thursday's gains, the Dow and S&P 500 are now up more than 1 percent for the year.
The Nasdaq rose 37, or 1.4 percent, at 2,653. The technology heavy index is now flat for the year.
Financial markets were gripped by fear over Japan's nuclear crisis on Wednesday. The Dow Jones industrial average had its biggest loss since August, nearly erasing its gains for the year.
The dollar dropped to an all-time low against the Japanese yen late Wednesday, reaching 76.53 yen to the dollar. By Thursday afternoon, the yen had weakened and was trading at 78.85 yen to the dollar. When the yen loses strength, it takes more yen to buy one dollar.
A stronger yen would hurt Japan's exporters, potentially dealing another problem to an economy already wracked by an earthquake, tsunami and evolving nuclear crisis.
Finance ministers from the Group of Seven industrialized countries are due to hold a conference call later Thursday to discuss ways to calm financial markets and possibly curb the yen's rise.
A separate report from the Labor Department showed consumer prices edged higher in February. The Consumer Price Index rose 0.5 percent last month, slightly stronger than forecasts. Core prices, which exclude food and fuel costs, edged up 0.2 percent, the same as the previous month.