Stocks sharply higher on jobs, JPMorgan earnings

    NEW YORK (AP) ? Stocks jumped for a second day Thursday after the government reported a decline in the number of people seeking unemployment benefits and JPMorgan Chase & Co. announced strong earnings.

    JPMorgan Chase & Co. rose 3 percent after the bank reported that higher investment banking fees raised its net income above analysts’ expectations.

    The Standard & Poor’s 500 index rose 8 points, or 0.6 percent, to 1,326 in morning trading. The Dow Jones industrial average rose 77, or 0.6 percent, to 12,568. The Nasdaq composite rose 18, or 0.6 percent, to 2,814.

    Applications for unemployment benefits fell to a three-month low last week, a sign that companies are laying off fewer workers. At 405,000, the figure is still above the 375,000 that signals healthy job growth.

    In a separate report, the government also said an increase in car sales and a drop in gas prices pushed up retail sales slightly in June.

    ConocoPhillips rose 7 percent, the most of any stock in the S&P 500 index, after the country’s third-largest oil company said it would split in two. One company will be an oil producer, and the other a refinery. Investors preferred two simple businesses to one complicated one.

    Investors largely shrugged off a warning on the U.S. debt rating as a stalemate continued in Washington over raising the government’s borrowing limit. Moody’s threatened late Wednesday to lower the U.S. credit rating below the highest grade of triple-A, citing the risk that the government might fail to make its debt payments if an agreement isn’t reached by an Aug. 2 deadline.

    In Europe, a threat resurfaced that Italy’s government could lose control of the country’s debt crisis. Yields on Italy’s debt jumped to their highest level since the introduction of the euro following a bond sale. A debt default for an economy as large as Italy’s would hurt lending across the globe.

    YUM Brands Inc. rose 2.7 percent after the owner of the Pizza Hut, Taco Bell and KFC fast-food chains said its earnings rose on strong international sales. Marriott International Inc. fell 6 percent after the hotel chain said it would earn less in the full year than previously expected.

    Data storage equipment maker Emulex Corp. rose 1.3 percent after a Morgan Keenan analyst raised his rating for the company, saying he expected profit to grow for the rest of the year.

    Federal Reserve Chairman Ben Bernanke begins a second day of testimony before Congress Thursday. On Wednesday, Bernanke’s remarks that the Fed would be open to new economic stimulus measures sent stocks sharply higher. A speech by another Fed official saying the central bank had exhausted its power to stimulate the economy cooled the rally.