NEW YORK (AP) — Encouraging economic reports are sending stocks slightly higher early Thursday. The number of people applying for unemployment benefits dropped last week to the lowest level since April 2008, the latest sign that the job market is healing.
Applications for unemployment benefits fell 4,000 to 364,000 last week, the third straight drop. The Conference Board also reported that its measure of future economic activity had a big increase last month. The second straight gain signaled that the U.S. economy was picking up speed and the risk of another recession was fading.
Quincy Krosby, chief market strategist for Prudential Securities, said the reports show that the economy has “grudgingly continued on a positive path.” However, Krosby also said the economy needs to grow at a faster pace than 2 percent to be able to survive any shocks caused by the European debt crisis or a sharp slowdown in China’s economy in 2012.
The Dow Jones industrial average rose 30 points, or 0.3 percent, to 12,137 as of 11 a.m. The S&P 500 index rose 5 points, 0.4 percent, to 1,249. The Nasdaq was up 14, or 0.5 percent, at 2,592.
The government also lowered its estimate of U.S. economic growth in the July-September quarter to an annual rate of 1.8 percent from 2 percent. That was still the fastest growth this year, up from 1.3 percent in the April-June quarter.
Economists think the improving job market, strong holiday shopping, and cheaper gas prices will leave consumers with more money to spend. That would get the economy growing at an annual rate of more than 3 percent in the final three months of this year, which would be the fastest pace since 3.8 percent growth in the spring of 2010.
In corporate news:
— Mead Johnson Nutrition Co. plummeted 11 percent, the most in the S&P 500, on news that Wal-Mart Stores Inc. pulled a batch of its powdered infant formula from more than 3,000 of its stores nationwide. A newborn Missouri boy was fed a batch of the Enfamil Newborn powder made by Mead and died from what preliminary tests indicate was a rare bacterial infection.
— Tibco Software Inc. jumped 7 percent after the business software maker reported a 20 percent increase in revenue and net income that was far ahead than what Wall Street analysts were expecting.
— Bed, Bath & Beyond Inc. slid 5 percent after the retailer warned investors that its fourth-quarter earnings might be lower than analysts had expected. Third-quarter sales also fell below analysts’ expectations.