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.
Dow Jones Industrial Average
shot up 118 points, or 1%, to 12,508, with especially strong support from
, and the
jumped 15 points or 1.1%, at 1393. The
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
, 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
. Verizon shares were up 5.3% at $38.94.
Also, before the market opened, Deutsche Bank's Mike Mayo recommended buying
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
, 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.
In other positive analyst research, United Airlines operator
was upgraded by both Lehman and Soleil a day after announcing it will cut down its fleet and lay off about 1,000 more workers by year-end than it had originally planned on doing. Shares surged 12.3%.
Spiking fuel costs and a generally difficult macroeconomic environment have forced several airlines to make similar moves, among them
, which today said it will cut domestic mainline departures by 16% starting in September and plans to lay off 3,000 employees. Further, CEO Larry Kellner and president Jeff Smisek said they would cut their salaries for the rest of the year and forego benefits from the 2008 incentive program.
Continental shares were up 8.1%., and
leaped 15% on a Lehman upgrade. Yesterday the carrier announced that its traffic had picked up by 4.3% in May.
Retailers were also in focus, with many of the nation's chain stores reporting their monthly results. Many were better than expected.
, the world's biggest store operator, said same-store sales climbed 3.9% in May, excluding fuel sales, and its shares were up 2.2%. Total sales advanced 9.8% to $31.04 billion. The stock rose 3.4%.
, however, saw its shares decline fractionally after the company said last month's comparable sales eased 0.7%. Still, shares were better by 1.3%.
moved up 1.2% even though same-store sales dropped 14%, and
edged ahead despite a 6% comps decline.
Among commodities, crude oil was rising $1.06 to $123.36 a barrel, and gold futures were dropping $7.50 to $876.30 an ounce. Gas at the pump is now only a penny away from the $4 mark, with the national average reaching a new record of $3.989 a gallon.
The U.S. dollar weakened by 0.6% against the euro at $1.5531 and climbed by 1.1% against the yen to 106.13.
Back in analyst calls,
Royal Bank of Scotland
was lifted to buy from hold at Citigroup, and teen apparel retailer
was upped to outperform at Friedman Billings. RBS shares were up 2.8% on the
, and Hot Topic soared 17.3%.
On the other hand, Cowen & Co. downgraded Acrobat software maker
to neutral from outperform, pushing the stock down 1.2%; UBS slapped a sell sticker on bulldozer maker
, after which the stock lost 0.6%; and
was recently flat after getting cut to underperform at Oppenheimer.
Treasury prices were sinking. The 10-year note shed 9/32 in price to yield 4.02%, and the 30-year bond was off 7/32 in price, yielding 4.71%.
Foreign markets were mixed. The Hang Seng Index in Hong Kong tacked on 0.6%, but the Nikkei 225 in Tokyo gave up 0.7% overnight, but in Europe, London's FTSE 100 added 0.3% as Germany's Xetra Dax lost 0.4%, and the Paris Cac was down 0.1%.