Stocks edge higher after jump in manufacturing

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NEW YORK (AP) — Stocks edged higher in early trading Thursday after an unexpected rebound in manufacturing in the Northeast. Union Pacific Corp., the nation’s largest railroad, surged after its earnings came in well ahead of analysts’ estimates.

The Federal Reserve Bank of Philadelphia said regional manufacturing was “showing signs of recovery.” Its index of manufacturing, shipments and new orders was far better than economists had forecast.

The Dow Jones industrial average rose 37 points, or 0.3 percent, to 11,542 at 10:20 a.m. Eastern.

Other economic reports were mixed. The Labor Department said new applications for unemployment benefits dropped to 403,000 last week, a sign that layoffs are easing. On the down side, sales of previously-occupied homes fell 3 percent last month.

The S&P 500 rose 5, or 0.4 percent, to 1,215. The Nasdaq fell 2, or 0.1 percent, to 2,602.

Several large companies reported earnings before the market opened. Southwest Airlines rose 3.7 percent after reporting income that was a penny per share higher than analysts predicted. AT&T Inc. lost 0.7 percent after reporting that the number of new iPhones activated last quarter was the lowest in a year and a half.

The New York Times jumped 5.5 percent after the company reported higher profits than expected. Union Pacific was up 5.3 percent after reporting that its income jumped 16 percent, more than analysts had forecast. The railroad operator also said it expects the growth to continue.

Microsoft Corp. will report earnings after the market closes.

European markets were broadly lower. Germany’s DAX fell 1.5 percent, France’s CAC-40 fell 1.2 percent and Italy’s FTSE MIB fell 2.1 percent. Investors are concerned that differences between the leaders of Germany and France may hold up an agreement on how to protect European banks from the likelihood of a default by the Greek government.

Officials from the 17 countries that share the euro will meet at a summit this Sunday to discuss ways to contain the damage. A messy default by Greece could to huge losses for European banks that hold Greek bonds.