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U.S. stocks higher but gains limited; Dow Jones up 0.54%

Published 12/29/2011, 09:58 AM
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Investing.com - U.S. stocks edged higher on Thursday, but gains were limited after relatively weak U.S. jobless claims data and amid sustained concerns over the debt crisis in the euro zone following a disappointing Italian bond auction.

During early U.S. trade, the Dow Jones Industrial Average rose 0.54%, the S&P 500 index added 0.50%, while the Nasdaq Composite index advanced 0.14%.

The U.S. Department of Labor said earlier that the number of individuals filing for initial jobless benefits in the week ending December 23 rose to 381,000, disappointing expectations for a rise to 370,000.

The previous week’s figure was revised up to 366,000 from 364,000, which was the lowest since April 2008.

Despite, the increase claims have fallen below 400,000, a level historically associated with an improving labor market, in seven of the past eight weeks.

Meanwhile, investors remained cautious after Italy’s Treasury missed its maximum target of EUR8.5 billion at a long term debt sale and the yield on 10-year Italian bonds rose slightly above the 7%, threshold widely seen as unsustainable.

Energy stocks led gains as shares in Chevron jumped 0.87% and Exxon Mobbil added 0.53%, while Noble Energy Inc. surged 1.78%.

The financial sector was also sharply higher with JPMorgan soaring 1.16% and Citigroup climbing 0.96%, while Bank of America and Goldman Sachs advanced 0.66% and 0.51% respectively.

The Financial Times reported earlier that the Federal Reserve has asked an industry task force to work on a plan to scale back systemic risk in the funding market and reduce trader dependence on the two clearing banks JP Morgan and Bank of New York Mellon.

Elsewhere, Yahoo shares added 0.38% after Alibaba Group hired a Washington lobbying firm in a sign that the Chinese e-commerce company would be willing to make a bid for all of the U.S. Internet company, in the event that talks to unwind their Asian partnership fail.

On the downside, Mosaic plummeted 3.08% after the fertilizer producer said it will slash its phosphate production because prices have fallen to unsustainable levels.

Across the Atlantic, European stock markets were sharply higher. The EURO STOXX 50 climbed 0.46%, France’s CAC 40 jumped 0.58%, Germany's DAX added 0.46%, while Britain's FTSE 100 rose 0.56%.

During the Asian trading session, Hong Kong's Hang Seng Index shed 0.25%, while Japan’s Nikkei 225 Index fell 0.8%.

Also Thursday, a report by Kingsbury International said that its Chicago purchasing managers index rose unexpectedly in December, ticking up to 62.5 from a reading at 62.6 the previous month.

Analysts had expected the Chicago PMI to decline to 60.4 in December.

Later in the day, the U.S. was to release industry data on pending home sales and an official report on crude oil stockpiles.



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