By Patrick Rizzo
Stocks opened higher on Wall Street Thursday, boosted by news that jobless claims tumbled in the latest week.
The Dow Jones Industrial Average, which dropped about 3 percent Wednesday on worries about Europe's financial crisis, was up about 1 percent shortly after the opening bell. The broader Standard &?Poor's 500?and the Nasdaq gained about 1 percent.
The Labor Department reported that new applications for unemployment insurance dropped 10,000 to a seasonally adjusted 390,000 versus a revised 400,000 the prior week. Analysts had been expecting claims of?about 400,000, Reuters said. What's more, the?4-week moving average,?which is seen as a better gauge?of employment trends,?dropped 5,250 to?400,000 versus the previous week's revised average of 405,250.
"Clearly, the labor market is improving, but at a very slow pace,"?Omer Esiner, chief market strategist at Commonwealth Foreign Exchange in Washington, told Reuters.
Markets were also helped by a drop in Italian bonds yields, which?soared Wednesday on concerns Italy will not be able to keep?its fiscal house?from collapsing. Yields eased a bit after the European Central Bank?increased its?purchases of Italian debt. But the ECB warned?governments not to expect the bank to rescue them with unlimited funds.?
Despite the upbeat jobless claims news, Europe's debt crisis will remain center stage for investors, who are hoping that Italy and Greece will move to usher in new governments that are prepared to take the steps needed to slash debt. Italy is especially worrisome for global investors because, as Europe's third-largest economy, it's seen as being too big to fail, but also too large to bail out.
Greece named ex-banker Lucas Papademos as prime minister of an interim government Thursday. Italy inched closer to a unity government after outgoing Prime Minister Sylvio Berlusconi called for early elections. Former European Commissioner Mario Monti, a well-respected figure in the international community, was widely expected to replace Berlusconi when he steps down.
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