Wall Street buoyed by fall-off in jobless claims

Dow Jones: 11,893.86 (+112.92) Nasdaq: 2,625.15 (+3.50) SP 500: 1,239.70 (+10.60):US STOCKS advanced yesterday, following the biggest fall in the Standard and Poor's 500 Index since August, as jobless claims dropped to the lowest level in seven months and concern about Europe's debt crisis eased.

The Dow Jones Industrial Average rose 112.92 points, or 0.9 per cent, to 11,893.86.

“The economic data will come back into focus as we shift our vision away from the political fear in the euro zone,” Mike Ryan, the New York-based chief investment strategist at UBS Wealth Management Americas, said. “As we remove uncertainties, the market starts focusing less on the risk scenarios . . . In the US, a decline in claims is very positive.”

Stocks rebounded after SP said a message was erroneously sent out to some of its subscribers suggesting France’s top-notch credit rating had been lowered. It affirmed France’s AAA rating. Italian government bonds rose as the European Central Bank was said to purchase the securities and after the nation sold the maximum amount of one-year bills on offer at an auction.

In Greece, Lucas Papademos, the former vice president of the ECB, was named to lead a unity government.

In the US, a report showed the number of Americans filing applications for unemployment benefits fell to the lowest level in seven months, a sign the recovery may be encouraging companies to limit cuts in headcount.

Federal Reserve chairman Ben S Bernanke said the central bank is concentrating “intently” on reducing unemployment and projects inflation to stay under control for the “foreseeable future”.

Cisco added 6.2 per cent to $18.70. CEO John Chambers is eliminating jobs, scaling back operating expenses and revamping a management structure that slowed decision making.

Merck gained 3.3 per cent to $34.92. The second-biggest US drug maker raised its dividend for the first time since 2004.

Apple lost 2.8 per cent to $384.41. Analysts at Cleveland Research reduced their predictions for shipments of the iPad to 12 million from 14 million in the quarter ending in December, saying “visibility from supply chain has softened” in recent weeks. – (Bloomberg)