Stocks rise for a second day on growth outlook

Associated Press
In this Wednesday, Jan. 2, 2013, photo, traders work on the floor at the New York Stock Exchange in New York. A positive start to U.S. corporate earnings season and a sharp improvement in China's monthly trade helped boost world stock markets Thursday Jan. 10, 2013. (AP Photo/Seth Wenig)
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In this Wednesday, Jan. 2, 2013, photo, traders work on the floor at the New York Stock Exchange in New York. A positive start to U.S. corporate earnings season and a sharp improvement in China's monthly trade helped boost world stock markets Thursday Jan. 10, 2013. (AP Photo/Seth Wenig)

NEW YORK (AP) — Stocks opened higher on Wall Street Thursday, gaining for a second day, after the European Central Bank chief said the region was poised to start growing again, bolstering expectations that the worst of the region's crisis is behind it.

The Dow Jones industrial average rose 40 points to 13,431 as of 9:56 a.m. EST. The Standard & Poor's 500 added six points to 1,468. The Nasdaq composite added 14 points to 3,120.

European Central Bank head Mario Draghi says the struggling euro area should start growing again later this year, but he warned that the region has yet to reach a turning point in its struggle with recession and handling its government debt load. The bank left its key interest rate unchanged Thursday at 0.75 percent, a record low.

Stocks gained despite a U.S. government report that showed weekly applications for U.S. unemployment benefits ticked up last week. The Labor Department said Thursday that applications rose 4,000 to 371,000, the most in five weeks. The previous week's total was revised lower.

Ford rose 41 cents to $13.88 after the company doubled its quarterly dividend to 10 cents, just nine months after paying its first dividend in more than five years.

Companies are sitting on record cash piles, having rebuilt their balance sheets following the financial crisis that started five years ago. Analysts at Deutsche Bank predict that corporations will stop adding to those cash piles this year and instead start returning more cash to shareholders, helping push the S&P 500 up to 1,575 by the end of the year. That would be a 10 percent increase from where it ended 2012.

Supervalu Inc. rose 50 cents to $3.55 after announcing that it had reached a $3.3 billion deal to sell its five of its biggest grocery chains — Albertsons, Acme, Jewel-Osco, Shaw's and Star Market — to an investor group led by the private equity firm Cerberus Capital Management.

Stocks are up on the year after lawmakers reached a last-minute compromise to stop the U.S. going over the "fiscal cliff," a series of tax hikes and government spending cuts that could have pushed the economy back into recession. A good start to the earnings season this week has also helped bolster demand.

The yield on the 10-year Treasury note rose 4 basis points to 1.90 percent. The yield on the note, which rises as bonds fall, has jumped almost 30 basis points.

Other stocks making big moves:

— Urban Outfitters rose $2.32 to $43.07 after the company said that it had record sales for the two months ending in December.

— Jewelry retailer Tiffany & Co. sank $2.05 to $61.21 after reporting that its sales increased during the critical holiday shopping season at a slower pace than previously expected. The company said its full-year earnings would come in at the low end of its prior forecast.

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