Wall Street buoyed by fall-off in jobless claims

Dow Jones: 11,143.31 (+423.37) Nasdaq: 2,492.68 (+111.63) SP 500: 1,172.64 (+51.88):US STOCKS rallied yesterday, following the worst plunge since the bull market began in 2009, as a drop in jobless claims and better than estimated corporate earnings tempered concern Europe's debt crisis is worsening.

All 10 groups in the Standard and Poor’s 500 advanced at least 2.5 per cent, with gains being led by financial and energy companies.

“We’re in the process of trying to establish a bottom,” James Paulsen chief investment strategist at Minneapolis-based Wells Capital Management said.

“The jobless claims number was calming in the middle of the storm. It’s a good reminder that – hey, we have stuff going on in Europe, but if the economy does not roll into a recession, there’s no reason for stocks to be selling at these levels,” he added.

Almost $3 trillion has been erased from US equity values in the last three weeks.

First-time applications for jobless benefits decreased 7,000 in the week ended August 6th to 395,000, the lowest since early April, the Labor Department said.

Economists forecast 405,000 claims, according to the median estimate in a Bloomberg News survey.

Bank of America, the nation’s biggest lender, added 7.1 per cent to $7.25. JPMorgan increased 6.8 per cent to $36.69.

Cisco Systems soared 16 per cent to $15.92. The company has reined in operating expenses, and unveiled a plan to cut about 6,500 jobs worldwide.

News Corp surged 18 per cent, the biggest gain in the SP 500, to $16.19. The owner of Fox TV and the Wall Street Journal posted profit that beat estimates and raised its dividend 27 per cent.

Kohl’s gained 7.3 per cent to $47.50. The fourth-largest US department-store chain said profit per share this year would be higher than it previously forecast.

Brinker International surged 14 per cent to $23.53. The operator of the Chili’s restaurant chain forecast 2012 profit that exceeded analysts’ estimates.

Energy shares in the SP 500 rose 5.2 per cent as crude oil rallied.

Chevron added 3.9 per cent to $94.07.

CF Industries gained 10 per cent to $164.19.

Mosaic increased 8.4 per cent to $64.46. – (Bloomberg)