In this March 2, 2011 photo, John Strazza, left, works with fellow traders on the floor of the New York Stock Exchange. (AP Photo/Richard Drew)
NEW YORK (AP) — Stocks jumped higher Thursday after an unexpected drop in new applications for unemployment benefits and higher February sales reports from retailers.
The Labor Department said first-time claims for unemployment benefits fell to 368,000. That’s the lowest level for claims since May 2008. Economists had expected them to rise. Separately, the Institute for Supply Management reported that its measure of hiring by service companies rose to the highest level since April 2006. The index covers a broad range of industries including retail, health care and financial services.
The signs of job growth followed a report Wednesday from payroll processor ADP that said that private employers are added more jobs than expected last month. Those gains are helping to bolster expectations that Friday’s jobs report will show that the unemployment rate fell from its current level of 9 percent.
The Dow Jones industrial average gained 183 points, or 1.5 percent, to 12,250 in afternoon trading. The Standard Poor’s 500 index rose 19, or 1.5 percent, to 1,328.
All 10 company groups that make up the SP index rose. Industrial companies had the largest gain, with 2.3 percent. Caterpillar Inc. gained 3 percent, the largest increase among the 30 stocks that make up the Dow average.
The Nasdaq composite index gained 48, or 1.7 percent, to 2,796.
The drop in unemployment claims pushed Treasury prices lower, raising their yields. The yield on the 10-year note rose to 3.57 percent, up from 3.48 percent late Wednesday.
Retailers Limited Brands Inc., Macy’s Inc. and Nordstrom Inc. all reported gains over the same time last year. Wendy’s/Arby’s Group Inc. trimmed its losses in the fourth-quarter and beat analysts’ revenue estimates. The stock rose 5 percent.
Oil prices eased slightly, but remained just above $100 a barrel. Concerns over the impact of high oil prices on the U.S. economy have rattled markets over the past week. Crude settled above $102 on Wednesday for the first time since September 2008.