Thursday: Dashing Through the Snow

By Andrew Morse ,

Maybe it's the holiday spirit. Maybe it's the anticipation of the office party. Maybe it's the record bonuses.

Whatever the reason, traders sent the

Dow Jones Industrial Average

higher as the Christmas countdown -- and rally -- continues. To be sure, the revelers got just a little out of hand: the

New York Stock Exchange

imposed a trading curb at 10:25 a.m. when the market shot up 50 points.

No doubt, a party in the bond market helped the stock celebration. Interest rates started falling after revised jobless claims for last week offered a bit of evidence that a slower economy might be one of the gifts under the tree. And news that America's trade deficit with the rest of the world posted its biggest drop ever -- down 30% to $8 billion -- also fueled the fixed-income fiesta. The 30-year bond rose 23/32, pushing the yield down to 6.65%.

Big winners midday:

General Electric

(GE:NYSE) and

Merck

(MRK:NYSE). The electronic appliances maker got a 2 1/8 kick after its board voted to increase its quarterly dividend and speed up its share buy-back program. Merck rose 2 5/8 after announcing it was joining with

Rhone-Poulenc

to form the world's largest animal medicine business. Both stocks are Dow components.

Traders were keeping their eyes on

3Com

(COMS:Nasdaq), expected to announce earnings after the close. The whisper in trading rooms is the maker of "router" technology will beat street estimates of 55-cents-a-share profits. 3Com gave up a little ground this morning, but that was after surging 5 1/8 to 77 1/2 yesterday.

Those getting an early lump of coal in their stocking: investors in Japan Inc. Yesterday, the

Nikkei Average

slid 2.6%, or 522 yen, to 19,571 -- the year's lowest levels. Published reports of rumors that

Kankaku Securities

, one of the country's largest investment houses, had suffered

Daiwa Bank

-sized trading losses in New York and that perennial basket-case

Nippon Credit Bank

was on the verge of announcing balance sheet mayhem, helped drag the average lower.

By Andrew Morse

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