Stocks advance in early trade as drop in weekly jobless claims boosts optimism about recovery

Stocks rise as weekly jobless claims fall

NEW YORK — Stocks turned higher after an early stumble Thursday as news of an improving job market stirred hopes of an improvement in the economy.

The Labor Department said new claims for unemployment insurance fell to a seasonally adjusted 502,000 from an upwardly revised 514,000 the previous week. That’s the fewest claims since the week ending Jan. 3, and below economists’ estimates.

The news is evidence the job market is slowly healing.

The gains in stocks were modest as investors grew concerned by Wal-Mart Stores Inc.’s lower-than-expected third-quarter sales, a sign of weak consumer spending.

The nation’s biggest retailer reported third-quarter earnings that beat analysts’ expectations, though sales at stores open at least a year dropped during the quarter. Wal-Mart also said sales at existing stores would range from a drop of 1 percent to a gain of 1 percent in its fourth quarter, a disappointment for investors. Sales at stores open at least a year are an important indicator of a retailer’s strength.

Because of its size, Wal-Mart is seen as a key indicator of consumer spending trends. Investors are still not convinced that spending by consumers will pick up enough to spur a strong recovery in the economy.

Meanwhile, Kohl’s Corp. said higher sales helped third-quarter profit rise 21 percent.

In the first hour of trading, the Dow Jones industrial average rose 13.45, or 0.1 percent, to 10,304.71.

The broader Standard & Poor’s 500 index rose 2.20, or 0.2 percent, to 1,100.71, and the Nasdaq composite index rose 9.32, or 0.4 percent, to 2,176.22.

Bond prices were mixed. The yield on the benchmark 10-year Treasury note, which moves opposite its price, was flat at 3.48 percent from late Tuesday. Bond markets were closed Wednesday for Veterans Day.

Crude oil fell 75 cents to $78.53 per barrel on the New York Mercantile Exchange.

Three stocks fell for every two that rose on the New York Stock Exchange, where volume came to 112.3 million shares compared with 120 million shares traded at same point Wednesday.

The Russell 2000 index of smaller companies rose 0.54, or 0.1 percent, to 593.25.

Overseas, Japan’s benchmark Nikkei stock average fell 0.7 percent. In afternoon trading, Britain’s FTSE 100, Germany’s DAX index and France’s CAC-40 each rose 0.3 percent.

Ieva Augstums reported from Charlotte, N.C.