Stocks open higher on hopes for jobs, more stimulus
U.S. stocks rose in early trading on Thursday, boosted by a combination of positive economic news from the U.S. and expectations of stimulus from Europe’s central bank. The price of oil is also showing tentative signs of stabilizing.
The stock market is bouncing back from a tough start to 2015.
Investors bid shares up sharply for a second straight day Thursday, erasing losses from the first few days of the year.
The gains were driven by a combination of positive economic news from the U.S. and hopes for stimulus from Europe’s central bank. The price of oil is also showing signs of stability after six months of heavy losses.
KEEPING SCORE: The Standard & Poor’s 500 index climbed 35 points, or 1.8 percent, to 2,061 as of 3:48 p.m. Eastern time. The gains eliminated the index’s losses for the year. The Dow Jones industrial average rose 302 points, or 1.7 percent, to 17,885. The Nasdaq composite jumped 85 points, or 1.8 percent, to 4,735.
JOBS OUTLOOK: Fewer Americans applied for unemployment benefits last week, a sign that employers are holding on to more of their employees as they expect the economy to keep growing. The Labor Department said Thursday that applications for unemployment benefits fell 4,000 last week to 294,000.
Economists forecast that a government report Friday will show that U.S. employers added 243,000 jobs last month.
EUROPE BOOST: Markets continued to rise a day after European data showed that consumer prices fell in December for the first time since 2009. That increased pressure on the European Central Bank to provide more stimulus for the region’s flagging economy. Many analysts expect the bank to announce a plan this month to buy European government bonds. Such a move is designed to hold down long-term interest rates and stimulate borrowing and spending.
THE REBOUND: After two days of strong gains, the stock market regained the big losses that it made in the first few trading days of the year. The Dow lost 460 points in the first two days of this week.
Minutes of the Federal Reserve’s December meeting, released Wednesday, show that Fed officials believed stagnant global growth posed one of the biggest downside risks to the U.S., particularly if it triggered turmoil in global financial markets or if any policy moves abroad proved ineffective.
THE QUOTE: The minutes were a clarification of the Federal Reserve’s “persistent message” that it would do all that it could to support not just the U.S. economy, but also the global economy, said Marc Zabicki, senior market strategist at Ameriprise Financial.
“That reference and that understanding, and that global view of the Federal Reserve, has been a boon to equities today,” he said.
EUROPEAN MARKETS: France’s CAC 40 jumped 3.6 percent and Britain’s FTSE 100 climbed 2.3 percent. Germany’s DAX gained 3.4 percent.
ENERGY: The price of U.S. crude oil was stable after falling to its lowest in nearly six years earlier this week. The plunge in oil the past three months has unnerved markets because it suggests weakness in the global economy. Part of the fall, however, is due to oversupply as energy companies maintain production levels to avoid losing market share. Benchmark U.S. crude rose 14 cents to close at $48.79 a barrel in New York. The price has slid by more than half since June. Brent crude, a benchmark for international oils used by many U.S. refineries, fell 19 cents to close at $50.96 a barrel in London.
REAPING DIVIDENDS: Ford said that it would pay investors a dividend of 15 cents a share in the first quarter. That’s an increase of 20 percent from the quarterly dividend paid last year. The company’s stock rose 39 cents, or 2.6 percent, to $15.43.
CHEERS: Constellation Brands, a beverage company that includes Corona and Negra Modelo beers, raised its full-year earnings outlook. The company’s stock rose $4.93, or 5 percent, or $107.98.
BONDS: In government bond trading, prices fell. The yield on the 10-year Treasury note climbed to 2.01 percent from 1.97 on Wednesday.
METALS: Gold edged down $2.20 to $1,208.50 an ounce, silver fell 16 cents to $16.39 an ounce and copper rose a penny to $2.77 a pound.
CURRENCIES: The euro dropped to $1.1790 from $1.1842 late Wednesday. It has fallen to a nine-year low due to the expectations of more central bank stimulus, which tends to weaken a currency. The dollar rose to 119.65 yen from 119.29 yen.
