Stocks surged Thursday after reports on the U.S. job market and Chinese exports lifted some of investors' anxiety about the global economic recovery.
The Dow Jones industrial average rose about 200 points in morning trading. The Dow and the Standard & Poor's 500 index climbed about 2 percent, while the technology-dominated Nasdaq composite index rose about 1.7 percent.
Energy stocks led the market higher after sliding in the final hour of trading Wednesday on concerns that BP would be forced to cut its
dividend because of the fallout from the Gulf of Mexico oil spill. BP rose 10.5 percent off a 14-year low, while Anadarko Petroleum Corp., which has a minority stake in the rig that caused the spill, rose 10.7 percent.
Investors have pounded stocks for more than a month because of concerns that Europe's sovereign debt crisis would slow a rebound worldwide. But Thursday's rally was the latest swing in a volatile market and could fizzle at the first sign of bad news. Some of the advance could be coming from what's known as "short-covering." That's when traders are forced to buy stock after having earlier sold borrowed shares in a bet that the market would fall. The moves can add to the market's climb.
Asian and European markets rose after China said exports rose 48.5 percent in May, while imports jumped 48.3 percent. The jump in trade provides some relief that mounting debt problems in Europe might not halt a global economic recovery. The 27-nation European Union is China's largest trading partner.
Economic recovery in China and other developing nations has outpaced a rebound in more developed economies, so a pullback there would deal a blow to global growth.
In midmorning trading, the Dow rose 202.62, or 2.1 percent, to 10,101.87. The Standard & Poor's 500 index rose 21.17, or 2 percent, to 1,076.86, while the Nasdaq composite index rose 36.25, or 1.7 percent, to 2,195.10.
The euro, which is used by 16 countries in Europe, rose to $1.2096 Thursday. The currency has become an indicator of investor confidence in Europe's economy. It has also influenced stock markets in recent weeks because of concerns that rising debt in countries like Greece, Spain and Portugal would upend the global recovery.
While investors worry about how Europe's debt problems could affect the rest of the world, there are also concerns about continued high unemployment in the U.S. High unemployment remains one of the biggest obstacles to a strong domestic rebound.
A Labor Department report Thursday said that new claims for unemployment fell by a less-than-forecast 3,000 to a seasonally adjusted 456,000. While that figure fell short of economists' forecast for a drop to 448,000, investors were heartened by figures showing total claims last week dropped by the largest amount in almost a year. Total unemployment benefit rolls fell by 255,000 to 4.5 million.
On its face the drop is good news but there it could also indicate that people have run out of their state benefits and are moving to longer-term federal benefits.
Still, the drop in total claims provides some hope that laid-off workers are starting to find new jobs. It was welcome relief after the Labor Department said last week that private employers slowed their hiring in May to the lowest levels since January.
Job creation is considered vital to a sustained recovery in the U.S. and consistently positive jobs data could get investors to regain confidence in a domestic recovery after worries about Europe's troubles have overwhelmed global markets for more than a month.
Crude oil rose $1.55 to $75.93 per barrel on the New York Mercantile Exchange. Gold fell.
Among energy stocks, BP PLC rose $3.06, or 10.5 percent, to $32.26, while Anadarko rose $3.72, or 10.7 percent, to $38.55.
About 2,500 stocks rose on the
New York Stock Exchange, while only about 250 fell. Volume came to 228 million shares, compared to 231 million traded at the same point Wednesday.
The Russell 2000 index of smaller companies rose $12.52, or 2 percent, to 630.81.
