Dow Jumps Over 100 as Jobless Claims Ease

Stocks opened higher Thursday as a strong reading on productivity and an easing in jobless claims helped cheer investors during a choppy week of trading.

The Dow Jones Industrial Average shot up more than 100 points, or over 1 percent. Techs were among the early leaders after Cisco posted strong results after the bell Wednesday.

The major averages are coming off two straight mixed sessions, with a late selloff Wednesday wiping out what had been strong gains. Stocks remained strong after the Fed's latest pledge to keep interest rates low for an extended period, but a vote in Washington to limit credit-card rates raised concerns about bank earnings and helped pare much of those gains.

In today's economic news, nonfarm productivity in rose at its fastest pace in six yearswhile new jobless claims and the four-week moving average of claims fell to 10-month lows.

"The steady decline in initial claims is convincing evidence that the pace of firing is tapering off," Zach Pandl, analyst at Nomura Securities International, said in a note to clients. "Overall these data offer more evidence that US labor market conditions are gradually improving."

The Bank of England and European Central Bank both held their interest rates steady, as expected. There had been some buzz that the ECB was considering raising European rates. Only Australia and Norway have so far raised rates. Iceland actually cut rates.

Banks advanced, with Bank of America and Citigroup both up about 2 percent, after a study suggested commercial real estate is likely to bottom in 2010.

Homebuilders also rallied, with Beazer and Lennar among the biggest gainers, after the Senate voted to extend the first-time homebuyers' tax credit through April 30. First-time buyers will be eligible for an $8,000 tax credit. The measure was also extended to current homeowners: Anyone who's owned a home for at least five years and decides to move will get a $6,500 tax credit.

Winterizing Your Portfolio - A CNBC Special Report
Winterizing Your Portfolio - A CNBC Special Report

A report out from Freddie Mac today showed 30-year fixed mortgage rates fell below 5 percent again: The 30-year averaged 4.98 percent last week.

Cisco rose after the networking-gear maker said the tech sector has hit bottom and a recovery is underway.

"There will be a good chance we will look back to see that Q3 was in fact the bottom, that Q4 was the tipping point, and the recovery started aggressively in Q1 of fiscal '10," Cisco CEO John Chambers said.

Semiconductors also rallied, with Intel up more than 2 percent, after a report showed chip sales are expected to rise 10 percent next year.

Toyota unexpectedly posted a profit and cut its full-year loss forecast in halfas stimulus programs around the world — both those specific to autos and to economies as a whole — boost sales.

Hyatt Hotelsrose in its debuton the New York Stock Exchange. Its IPO of 38 million shares priced last night at $25 a share, within the expected range.

Retailers reported their October sales this morning and more than half fell short of expectations. The sector traded mixed: JCPenney and Kohl's fell. Nordstrom and Gap advanced as retail analyst Dana Telsey said she's seeing some signs of a shift to more discretionary spending.

Teen retailers were hit hard: American Eagle and Aeropostale missed their targets by a long shot and Abercrombie said its sales fell a whopping 15 percent.

After the bell today, we'll get earnings reports from CBS, Nvidia and Starbucks, among others.

- Peter Schacknow contributed to this article.

Still to Come:

THURSDAY: Retailers report October sales; Earnings from CBS, Nvidia and Starbucks
FRIDAY: October jobs report; Geithner speaks; Droid phone launches; wholesale trade; consumer credit; Fed's Duke speaks

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