Jobs, Manufacturing Reports Boost Stock Market:

Stocks climb after drop in initial jobless claims; Manufacturing grows faster than expected:

Stephen Bernard and Tim Paradis, AP Business Writers
On Thursday April 1, 2010, 12:00 pm

NEW YORK (AP) -- Stocks rose Thursday after reports on jobs and manufacturing boosted hopes that a recovery is gaining traction.

The stock market is closed Friday and the bond market closes early for Good Friday.

A government report showing initial claims for unemployment benefits fell last week added to the market's enthusiasm following upbeat manufacturing reports overseas. In the U.S., a trade group's report signaled that manufacturing is growing faster than expected.

Stocks got a boost from a Labor Department report showing initial jobless claims fell 6,000 to a seasonally adjusted 439,000 last week. Economists had forecast claims would drop to 440,000.

The weekly report provides some reassurances a day after a payroll company's report on jobs unexpectedly said employers cut private-sector jobs last month. The government's monthly report on employment is scheduled to be released Friday. With the stock market closed investors won't get a good read on the market's reaction until Monday.

Economists predict the Labor Department will say employers added 190,000 jobs last month, which would be only the second month of jobs growth since the recession began.

"Just getting a number with six digits -- over 100,000 -- is I think very much encouraging to a lot of folks who really believe that none of this counts until we start creating jobs," said Jeffrey Kleintop, chief market strategist at LPL Financial in Boston.

Meanwhile, the Institute for Supply Management said that its manufacturing index rose to 59.6 in March from 56.5 in February. A number above 50 indicates growth and analysts polled by Thomson Reuters had expected 57.

International markets rose after new reports showed growth in manufacturing in China and the 16-country bloc that uses the euro. A separate report showed companies in Japan are more confident about the business climate.

In midday trading, the Dow Jones industrial average rose 81.09, or 0.8 percent, to 10,937.72. The Dow came within 43 points of the psychological barrier of 11,000, a level it topped in 18 months.

The Standard & Poor's 500 index rose 9.96, or 0.9 percent, to 1,179.39, while the Nasdaq composite index rose 11.88, or 0.5 percent, to 2,409.84.

Bond prices fell, pushing yields higher. The yield on the benchmark 10-year Treasury note rose to 3.87 percent from 3.83 percent late Wednesday.

The dollar fell against other major currencies, while gold rose.

Crude oil rose 85 cents to $84.61 per barrel on the New York Mercantile Exchange.

Stocks are trying to rebound after a disappointing end to an otherwise strong first quarter. Major indexes retreated Wednesday after payroll company ADP said private-sector employers cut 23,000 jobs in March. Economists had predicted ADP's jobs report would show 40,000 jobs were added to payrolls last month.

The Dow dropped 0.5 percent, while the S&P 500 fell 0.3 percent.

The ADP report is often used as an early indicator of the Labor Department's employment report, which will be released Friday. However, there can be wide variations because ADP only accounts for private-sector jobs.

The drop Wednesday brought a lackluster end to a strong first quarter. Stocks have consistently climbed in recent months as investors become more confident the economy is improving, though the growth is slow.

The Dow gained 4.1 percent for the quarter, its best first-quarter performance since 1999. Small, daily gains replaced the big triple-digit moves that defined the market's rally throughout much of 2009 as major indexes hit 12-year lows in March of that year.

The S&P 500 rose 4.9 percent during the first quarter, its best first-quarter since 1998.

In other trading Thursday, the Russell 2000 index of smaller companies rose 6.53, or 1 percent, to 685.17.

About four stocks rose for every one that fell to the New York Stock Exchange, where volume came to a light 343.8 million shares, compared with 359.9 million shares traded at the same point Wednesday.

Britain's FTSE 100 rose 1.2 percent, Germany's DAX index gained 1.3 percent, and France's CAC-40 rose 1.5 percent. Japan's Nikkei stock average rose 1.4 percent.

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