- 03Apr
(Reuters) - Stocks rallied more than 1 percent in early trading on Thursday as crude oil prices fell and jobless claims dropped to a 2-1/2 year low.
Initial jobless claims came in much stronger than expected at 368,000, one day after a similarly robust ADP report on private sector hiring. Taken together, the two could bode well for Friday's February payroll report.The Arab League said a peace plan for Libya was under consideration, and while have some have questioned the substance of the plan, put forth by Venezuela's Hugo Chavez, a resolution could remove a major headwind to equities.
Crude prices have spiked in recent weeks on concerns the unrest in Libya could lead to supply disruptions, resulting in a corresponding drop in stocks as market participants fretted that high energy costs will weigh on economic activity.
"A peace plan would really be a great sign for markets," said Michael Mullaney, a portfolio manager who helps manage $9.5 billion at Fiduciary Trust Co in Boston. "You could see a precipitous drop in oil prices, perhaps to the $80-90 per barrel range, which is the level we're looking at for it to no longer be a concern for spending."
April crude futures fell 0.5 percent but remained above the psychologically important $100 per barrel level. Brent crude oil was down 1.5 percent.
The Dow Jones industrial average .DJI jumped 147.09 points, or 1.22 percent, at 12,213.89. The Standard & Poor's 500 Index .SPX was up 15.47 points, or 1.18 percent, at 1,323.91. The Nasdaq Composite Index.IXIC gained 32.79 points, or 1.19 percent, at 2,780.86.
Several top U.S. retailers posted bigger-than-expected sales gains for February, though rising gas prices and a late Easter holiday could temper sales in March.
The S&P retail index .RLX rose 0.7 percent, while the Morgan Stanley retail index .MVR was up 0.4 percent.
Big Lots Inc (BIG.N) shares rose 2.2 percent to $40.72 after quarterly earnings beat expectations and it forecast strong 2011 profits.
H.J. Heinz Co (HNZ.N) rose 0.2 percent to $49.10 after quarterly income topped expectations and a deal to buy an 80 percent stake in a Brazilian food maker.
The Institute for Supply Management's non-manufacturing index came in at 59.7 in February, slightly above forecasts and higher than the January result. Stocks were little changed after the report.
(Editing by Jeffrey Benkoe)
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