FedEx earns, drop in claims push stocks higher
NEW YORK (AP) — Strong earnings from FedEx and a sharp drop in claims for unemployment benefits pushed stocks mostly higher in midday trading Thursday.
The Dow Jones industrial average rose 100 points, or 0.9 percent, to 11,923 shortly after noon Eastern. The Dow lost 360 points over the past three days on worries that Europe's latest plan to keep its currency union intact would fail.
Jack Ablin, chief investment officer at Harris Bank, said the upturn reflects a shift in investors' attention back to recent signs of strength in the U.S. economy.
"We're not completely insulated (from Europe), but trouble there doesn't necessary spell problems for us," Ablin said.
FedEx Corp. reported that its quarterly income nearly doubled on strong growth in online shopping during the holiday season. FedEx is seen as a bellwether for the economy. Its stock jumped 7 percent.
The number of people applying for unemployment benefits dropped last week to 366,000, the lowest level since May 2008. That's a sign that layoffs are easing, a first step toward bringing down the unemployment rate, which currently stands at 8.6 percent.
The gains were broad. All but one of the 10 industry groups in the S&P 500 rose, led by utilities and consumer staples. S&P's index of technology stocks edged down 0.2 percent.
The Standard & Poor's 500 rose 10 points, or 0.8 percent, to 1,221. The Nasdaq rose 9 points, or 0.4 percent, to 2,548.
In corporate news, Michael Kors Holdings Ltd. jumped 20 percent to $24.20 on its first day of trading. The initial public offering valued the fashion design company at $3.8 billion.
Novellus Systems Inc. jumped 21 percent. The semiconductor equipment maker said late Wednesday that it was being acquired by rival Lam Research Corp. Lam fell 4 percent.
Rite Aid Corp. rose 5 percent. The drugstore chain announced that losses had narrowed in its third quarter.
European markets rose slightly, a day after big declines, as an auction of Spanish government bonds drew strong demand from investors. Germany's DAX rose 1 percent; France's main stock index rose 0.6 percent.
The euro rose against the dollar, moving back above $1.30, a day after hitting an 11-month low. The yields on Spanish and Italian government fell, a sign that investors were less worried about the ability of those countries to pay back their debts.