Stocks rise on hopes Greek vote will be scuttled

NEW YORK (AP) ? Stocks rose in early trading Thursday as hopes grow that a plan to tackle the European debt crisis will survive.

The European Central Bank surprised markets early Thursday by cutting its benchmark interest rate to 1.25 percent. Lower interest rates often spur economic growth.

The Dow Jones industrial average rose 108 points, or 1 percent, to 11,941 as of 9:50 a.m. ET. The S&P 500 index rose 8 points, or 0.6 percent, to 1,246. The Nasdaq rose 12, or 0.5 percent, to 2,652.

Greece’s prime minister shocked investors with a call this week to put a European rescue package to a vote. The prime minister was in an emergency meeting Thursday after members of his government called for him to step down. The hope is that a new government would approve the rescue package without a referendum.

The European Central Bank had increased its key rate twice this year, but that was before Mario Draghi took over as head of the bank this week.

The Labor Department reported that the number of people who applied for unemployment benefits dipped slightly last week. Applications fell by 9,000 to 397,000.

Companies reporting quarterly earnings are among those making the biggest gains.

Estee Lauder Cos. jumped 16 percent, the top stock in the S&P 500. The company’s quarterly earnings soared 46 percent on strong global sales, which beat analysts’ expectations. The company also lifted its annual earnings outlook.

Alpha Natural Resources rose 11 percent. The coal producer’s profit more than doubled, helped by its acquisition of rival Massey Energy Co. and higher prices for coal used to make steel. The results topped analysts’ expectations.

Qualcomm Inc. gained 6 percent, after the chip-maker for mobile phones said rising smartphone demand helped it post results that were stronger than analysts were expecting.

Kraft Foods Inc. rose 4 percent. The food company, whose brands include Nabisco and Maxwell House, reported a 22 percent jump in income thanks to higher prices on some of its products. Kraft also raised its full-year profit forecast.

Stocks made broad gains Wednesday as European leaders scrambled to save their plan to prevent the European financial crisis from getting worse. Better corporate earnings and an increase in hiring by private companies also helped lift stock indexes after a two-day fall. The S&P 500 is still down more than 3 percent for the week.