Stocks rise as unemployment claims remain modest

NEW YORK (AP) ? Stocks rose Thursday morning after the government reported that the number of claims for unemployment benefits remained at a level consistent with modest job growth. Contracts to buy homes rose to the highest level in a year and a half.

The four-week average of unemployment claims fell to a three-and-a-half-year low of 375,000, an indication that hiring could pick up.

The National Association of Realtors says its index of sales agreements jumped 7.3 percent last month. The news sent stocks of home builders sharply higher. PulteGroup Inc., Lennar Corp. and Masco Corp. all rose close to 4 percent.

The Dow Jones industrial average rose 75 points at 12,227 at 10 a.m. It fell nearly 140 points the day before.

The S&P 500 was up 7 points at 1,257, and is at breakeven for the year. The Nasdaq composite index rose 6 at 2,596.

Europe’s debt woes weighed on currency markets. The euro fell to its lowest level against the dollar this year and a decade-low against the Japanese yen. At one point the euro’s value against the dollar hit $1.28, the lowest level since September 2010.

Italy’s borrowing costs fell for a second day. The Bank of Italy raised $3.3 billion by selling 10-year bonds at an average yield of 6.98 percent. That’s lower than the 7.56 percent it had to pay at an equivalent auction last month.

However, the country’s 10-year borrowing rate remains uncomfortably close to the 7 percent level that economists consider unsustainable. Greece, Ireland and Portugal all had to seek financial bailouts after their 10-year bond yields rose above 7 percent.

Italy’s new premier said his government has more to do before it convinces financial markets it can manage the heavy debts that have made it the focus of the euro zone crisis.

In other corporate news:

? Inc.’s stock slid over 3 percent, after a Goldman Sachs analyst said the online retailer could miss Wall Street sales expectations.

? Netflix Inc. fell 2 percent after a report that its customer satisfaction numbers had dropped.