Stocks rise modestly following decline in jobless claims, rise in durable goods orders

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Stocks rise modestly on upbeat economic reports

NEW YORK — Stocks rose modestly Thursday after reports on unemployment and durable goods orders showed the economy is continuing its recovery.

Both the Standard & Poor’s 500 and Nasdaq composite indexes reached new 2009 highs in morning trading.

The upbeat economic figures helped assuage investors about the rebound, a day after a disappointing report on November sales of new homes renewed caution about the health of the economy.

Overseas markets rose. Asian markets rallied on expectations China will maintain loose monetary policy.

The Labor Department said the number of new claims for unemployment benefits fell to 452,000 last week, down 28,000 from the previous week, providing the latest sign the job market is gradually improving. It was the best figure since September 2008, before the credit crisis peaked. A recovery in the job market is vital to a strong recovery.

Economists polled by Thomson Reuters predicted claims would fall to 470,000.

A report from the Commerce Department also showed the manufacturing sector is improving and should provide support as the nation exits its worst recession since the Great Depression.

Orders to U.S. factories for big-ticket durable goods increased less than expected in November, rising 0.2 percent. However, excluding volatile transportation orders, durable goods orders rose 2 percent compared with October, double economists’ average estimate.

The Dow Jones industrial average rose 17.00, or 0.2 percent, to 10,483.44. The Standard & Poor’s 500 index increased 2.59, or 0.2 percent, to 1,123.18, while the Nasdaq composite index rose 7.72, or 0.3 percent, to 2,277.36.

The market will close at 1 p.m. EST Thursday and be closed Friday for Christmas. Trading has been light throughout the week heading into the holiday weekend. Low volume can exaggerate market movements.

Advancing issues outnumbered decliners by about 3 to 1 on the New York Stock Exchange, where volume came to 48.8 million shares, compared to 71.2 million traded at the same point Wednesday.

Investors will also keep a close eye Thursday on the healthcare sector after the Senate passed reform legislation for the industry. At this point, the move is somewhat symbolic because the Senate must now agree to a unified bill with the House of Representatives before President Barack Obama can sign any changes into law.

A closely watched fund that tracks healthcare stocks in the S&P 500 rose less than 0.1 percent in morning trading.

Stocks eked out gains on Wednesday as rising commodities prices pushed energy and materials stocks slightly higher. Commodities rose as the dollar fell for the first time in four days. A weaker dollar makes commodities more attractive for foreign investors.

The boost from energy and materials stocks helped offset the disappointing report on sales of new homes. The Commerce Department said sales of new homes in November tumbled 11.3 percent to their lowest level since March. The Dow rose less than 0.1 percent, while the S&P gained 0.2 percent.

The dollar was mixed against other major currencies Thursday, while gold prices rose.

Meanwhile, bond prices fell modestly. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3.76 percent from 3.75 percent late Wednesday. The yield on the three-month T-bill, considered one of the safest investments, was unchanged at 0.05 percent.

The Russell 2000 index of smaller companies rose 2.48, or 0.4 percent, to 633.46.

Overseas, Japan’s Nikkei stock average rose 1.5 percent. Britain’s FTSE 100 rose 0.6 percent and France’s CAC-40 rose 0.1 percent. Germany’s market was closed for Christmas.