From The Associated Press
NEW YORK —
The stock market headed higher in early trading Thursday, latching on to a piece of encouraging news about U.S. unemployment and ignoring worrisome developments in Europe.
The major stock indexes all rose, putting the market on track for its first up day this week. For the Dow Jones industrial average, its 41-point gain in early trading was a reversal from triple-digit declines on Tuesday and Wednesday.
Traders seemed to latch on to a report from the Labor Department saying that weekly applications for unemployment aid fell to their lowest level since February 2008, before the financial crisis imploded.
In early trading, the Dow was up 41 points to 13,386. The Standard & Poor’s 500 was up eight to 1,441. The Nasdaq composite index was up 19 to 3,071.
The markets shrugged off a stream of negative developments. Among them: The Commerce Department reported that foreign demand declined for American-made cars and farm goods. In Germany, economic researchers predicted the country’s growth would slow, and warned that patience for bailing out weaker European countries was evaporating. Unemployment in Greece, one of the countries surviving on bailouts, hit a record high of just more than 25 percent. And the Standard & Poor’s ratings agency late Wednesday cut its rating on Spain’s debt.
In Tokyo, where the International Monetary Fund and the World Bank were meeting, IMF chief Christine Lagarde warned that the global economic recovery is weaker than many had expected. She called for urgent action to fix Europe’s debt problems and an approaching fiscal crisis in the U.S.
U.S. Treasury Secretary Tim Geithner tried to cast a more optimistic tone. He praised European leaders for efforts to solve the debt crisis. He said the Obama administration intends to resolve the fiscal “cliff” issue before the end of the year. That’s when higher taxes and lower government spending are scheduled to kick in unless Congress can work out a compromise. “We’re going to take a run at it,” he said.
The stock market languished earlier in the week because traders were disappointed when the IMF lowered its prediction for global growth. Alcoa, the aluminum maker whose earnings report is closely watched because it’s considered the kickoff to earnings season, reported a quarterly loss late Tuesday.
Among the stocks making big moves Thursday:
—Sprint Nextel shares soared 10 percent, rising 53 cents to $5.57 following a report that the company could be bought by Softbank, a Japanese cell phone provider.
—Grocery store Safeway fell nearly 6 percent, losing 93 cents to $15.36, after reporting a lower profit margin and lower-than-expected sales at stores open at least a year.