NEW YORK (AP) — Stocks opened broadly higher Thursday on an unexpected drop in unemployment claims and signs of progress in Europe's debt crisis. The gains came one day after the Dow Jones industrial average sank nearly 400 points.
Wednesday's losses were the worst for the stock market since the volatile trading in August. Traders are concerned that a debt crisis in Italy and Greece might lead to a painful global recession.
Those worries eased slightly Thursday after Italy sold $6.8 billion worth of debt at borrowing rates that were more favorable than analysts expected. Italy's president also reassured markets that Premier Silvio Berlusconi will step down after a new austerity budget is passed. Markets have seen Berlusconi as an obstacle to broader economic reforms.
Greece, the other focus of Europe's debt crisis, announced that former European Central Bank vice president Lucas Papademos will serve as prime minister of an interim government. Papademos will lead a government whose aim is to pass austerity measures needed for the country to receive additional financial support from international lenders.
In the U.S., the number of applications for unemployment benefits fell to 390,000 last week. That was the lowest level since mid-April and a sign that the job market may be improving. Economists had expected 400,000 applications.
The Dow was up 126 points, or 1.1 percent, to 11,906 fifteen minutes after the market opened. It plunged 389 points Wednesday after Italy's borrowing rates soared to a dangerous level and talks in Greece on naming a new prime minister broke down.
The Standard & Poor's 500 index gained 13, or 1.1 percent, to 1,242. The Nasdaq composite added 26, or 0.7 percent, to 2,641.
In corporate news:
— Cisco Systems Inc. rose 6.3 percent after its quarterly results beat Wall Street's estimates.
— Green Mountain Coffee Roasters Inc. plunged 30 percent after its revenues fell short of analyst expectations.
— Viacom Inc., owner of MTV Networks and Comedy Central, rose 0.4 percent after it earned more than analysts predicted. Most of the increase was due to its Paramount Pictures division.
- Silvio Berlusconi