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US stocks open higher on European stimulus speculation

up-arrowNEW YORK — 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 market is bouncing back from a big slump in the first trading days of the year.

KEEPING SCORE: The Standard & Poor’s 500 index climbed 26 points, or 1.3 percent, to 2,052 as of 10:02 a.m. Eastern. The Dow Jones industrial average gained 237 points, or 1.4 percent, to 17,825. The Nasdaq composite climbed 62 points, or 1.3 percent, to 4,712.

JOBS OUTLOOK: Fewer Americans applied for unemployment benefits last week, a sign that employers expect the economy to keep growing, requiring them to hold on to workers. The Labor Department said Thursday that applications for unemployment benefits fell 4,000 last week to a seasonally adjusted 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 consumer prices fell in December for the first time since 2009. That increases 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 in an attempt to hold down long-term interest rates and stimulate borrowing and spending.

EUROPEAN MARKETS: France’s CAC 40 jumped 2.7 percent and Britain’s FTSE 100 climbed 1.9 percent to 6,526.24. Germany’s DAX was up 1.7 percent at 9,676.11. Futures pointed to strong gains on Wall Street on the open.

ENERGY: U.S. crude oil was stable after falling to its lowest in nearly six years earlier in the weak. The plunge in oil prices the past three months has unnerved markets as 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 was up 43 cents at $48.86 a barrel on the New York Mercantile Exchange. It rose 72 cents to close at $48.65 on Wednesday. The price of oil has fallen by more than half since June.

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 dividends paid last year. The company’s stock rose 42 cents, or 2.8 percent, to $15.46.

BONDS: In government bond trading, prices fell. The yield on the 10-year Treasury note climbed to 2 percent from 1.97 on Wednesday.

CURRENCIES: The euro dropped to $1.1789 from $1.1842 late Wednesday. The common European currency 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 119.57 yen from 119.29 yen.

 

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About Ross Reily

Ross Reily is editor of the Mississippi Business Journal. He is a husband to an amazing wife, dad to 3 crazy kids and 2 dogs. He is also a fan of the Delta State Fighting Okra and the Boston Red Sox.

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