Stocks Building on Early Gains
06/05/08 - 11:24 AM EDT
Sarina Penn
Updated from 10 a.m. EDT
Stocks in the U.S. were leaping early Thursday as good news from various slices of the corporate world coupled with at least a momentary decline in initial jobless claims. The Dow Jones Industrial Average shot up 118 points, or 1%, to 12,508, with especially strong support from Verizon (VZ Quote - Cramer on VZ - Stock Picks), and the S&P 500 jumped 15 points or 1.1%, at 1393. The Nasdaq Composite lifted by 34 points, or 1.4%, to 2537. Helping keep the mood cheery was the Labor Department, which said that the number of people filing for unemployment benefits slid to 357,000 last week, down by 18,000 from the prior week's upwardly revised figure. Economists were expecting 372,000 claims, on average. Meanwhile, Verizon more than recovered from a loss in the prior session after confirming it will buy Alltel for $28.1 billion via its Verizon Wireless joint venture with Vodafone (VOD Quote - Cramer on VOD - Stock Picks), which will make it the largest U.S. mobile carrier. The deal, news of which broke yesterday, comes just months after Alltel was taken out by TPG Capital and Goldman Sachs (GS Quote - Cramer on GS - Stock Picks). Verizon shares were up 5.3% at $38.94. Also, before the market opened, Deutsche Bank's Mike Mayo recommended buying Lehman Brothers (LEH Quote - Cramer on LEH - Stock Picks) stock, saying that "worst-case scenarios" are already baked into the price. A Bernstein analyst kept his market perform rating on the stock. Those moves came a day after Merrill Lynch upgraded Lehman to a positive ranking, and all three analysts have said that Lehman won't fall apart in the same manner that Bear Stearns, now part of JPMorgan Chase (JPM Quote - Cramer on JPM - Stock Picks), did three months ago. Lehman's cash problems led to speculation of a collapse almost immediately following the Bear debacle in March, and earlier this week the stock took a beating on rumors that the brokerage continues to struggle mightily. Recently, however, shares were gaining 4.8% at $32.90.
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