Dow soars 423 points on economic news - CBS News 8 - San Diego, CA News Station - KFMB Channel 8

Dow soars 423 points on economic news

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Trader Edward Curran smiles as he works on the floor of the New York Stock Exchange Thursday, Aug. 11, 2011. (AP Photo/Richard Drew) Trader Edward Curran smiles as he works on the floor of the New York Stock Exchange Thursday, Aug. 11, 2011. (AP Photo/Richard Drew)

NEW YORK (AP) — Stocks are rising at the close of trading after investors latched onto some small signs that the economy might not be headed into another recession.

Fewer Americans joined the unemployment line last week, and a technology bellwether said revenue could grow faster this quarter than analysts expected. The news is pushing down prices on long-term Treasurys down, and gold is down from its record high.

The Dow Jones industrial average is up 423 points Thursday, or 3.9 percent, to 11,143. It's the first time the Dow has ever had four straight 400-point days.

The S&P 500 is up 51, or 4.6 percent, to 1,173. The Nasdaq is up 111, or 4.7 percent, to 2,493. All three major U.S. stock indexes are down at least 1.6 percent for the week.

THIS IS A STORY UPDATE. For an earlier story, read below.

NEW YORK (AP) — Investors have been looking for any small sign that the economy isn't headed into another recession. Thursday, they got just that, sending stocks surging.

Fewer Americans joined the unemployment line last week and a technology bellwether bested analyst expectations. In Europe, leaders of France and Germany, the region's biggest economies, said they will meet next week to talk about how to solve Europe's financial difficulties.

The Dow Jones industrial average rose 290 points, or 2.7 percent, to 11,011 an hour after markets opened. The gain pulls the average further away from bear market territory: The Dow ended Wednesday at 16.3 percent below its high for the year, set on April 29. A drop of 20 percent would mean the bull market that began in March 2009 has turned into a bear, a long period of stock declines.

The number of people filing for unemployment benefits for the first time fell to 395,000 last week, down 7,000 from a week earlier. It's the first time that number has dropped below 400,000 in four months. Analysts said it may be a sign that the job market is slowly improving after its three-month slump. Job growth slowed to an average of 72,000 in May, June and July. In the previous three months, employers added 215,000 jobs per month, on average.

"It's the first scrap of economic data we've had recently that says the idea that we're going into another recession may be overdone," said Carlton Neel, who manages about $2 billion as a senior portfolio manager at Virtus Investment Partners.

He said investors are so scared of being the last one out of the market in a downturn or the last one in during a rally that they are stampeding in herds, creating more volatility.

"Fear tends to be a much more powerful emotion, and the sell-offs tend to be more violent than the rallies," he said. "But people are worried about missing the bottom, so you will have a few melt-ups along the way." That's because memories of the last meltdown in 2008 are still fresh in the mind of many investors.

The S&P 500 index rose 33, or 3 percent, to 1,154. The Nasdaq composite index rose 78, or 3.3 percent, to 2,460.

Investors had been growing more worried about the economy since the government said last month that it grew at its slowest pace in the first half of 2011 since the recession ended in 2009. Worries about the weak economy and the first-ever downgrade of the U.S. credit rating contributed to big swings in stocks this week.

Only 16 stocks in the S&P 500 index fell.

Technology stocks helped lead the U.S. market higher. Cisco Systems Inc. reported profit for its latest quarter that topped analysts' expectations. It is considered a bellwether for the tech industry because it is the world's largest maker of computer networking equipment. Cisco also said revenue may grow more quickly this quarter than analysts were anticipating. Cisco rose 16.7 percent for the biggest rise among stocks in the S&P 500. As a group, tech stocks in the S&P 500 rose 3.1 percent.

Financial stocks also rebounded from their steep drop Wednesday, up 3.4 percent after a 7.1 percent drop a day earlier.

Investors have been plagued by worries that Europe's debt problems could hurt the banks that own European government bonds. Pain for European banks could lead to more trouble for the U.S. banking industry and economy because the global financial industry is so closely linked.

Investors have focused in particular on French banks this week. The head of France's central bank said Thursday that the country's banks are solid and blamed "unfounded rumors" for big drops in their stocks. Indexes in Europe also rose Thursday, erasing earlier losses. Germany's DAX is up 3.2 percent. France's CAC 40 is up 2.3 percent — it had been down more than 2 percent earlier in the day.

In the U.S., media conglomerate News Corp., which owns Fox News and The Wall Street Journal, rose 12.7 percent. It reported earnings late Wednesday that were better than analysts expected.

Gold prices fell $25.10 per ounce to $1,759.20. CME Group raised the amount of money that investors must put up to buy a gold contract on its COMEX exchange by 22 percent late Wednesday, driving prices off all-time highs above $1,800 per ounce as some investors were forced out.

The Dow on Wednesday plunged 519.83 points on worries about Europe's debt problems and the weak economy. It was the third straight day that the Dow moved more than 400 points, either up or down. That hasn't happened since November 2008.

Copyright 2011 The Associated Press.

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