Dow on its way to breaking six-day losing streak

By Joshua Freed

Associated Press

Published: Thursday, May 10 2012 1:27 p.m. MDT

Stocks rose on Thursday, putting the Dow Jones industrial average on track to break a six-day losing streak.

The gains came after the government said claims for unemployment benefits edged lower last week. Investors have been worried that a strong start to hiring this year was coming to an end.

The Dow was up 40 points at 12,875 in afternoon trading after rising as much as 96 points in the morning. The Standard & Poor's 500 index rose six points to 1,360. The tech-heavy Nasdaq composite index rose three points to 2,938 after spending some of the day in negative territory.

Cisco Systems, one of the 30 stocks in the Dow average, plunged 10 percent after warning that technology spending appeared to be slowing down and that its revenue would rise much less than analysts expected this quarter. Hardware maker Oracle fell almost 3 percent.

Before Thursday, the Dow had fallen six days in a row, its longest losing streak since August. Investors were encouraged by the Labor Department's report that applications for unemployment benefits dropped 1,000 to 367,000 in the week ending May 5.

The four-week average, which economists watch more closely, fell 5,250 to 379,000. When that figure remains consistently below 375,000, it suggests that job growth is strong enough to lower the unemployment rate.

The numbers could dispel nascent fears that that strongest yearly start for hiring since the recession ended 2009 was sputtering.

Nine out of 10 industry groups in the S&P 500 rose, with only tech shares declining. Utilities were the biggest gainers, up 1.1 percent, followed by financial stocks, up 0.8 percent.

Stocks also benefited from news that Spain would take over Bankia SA, the country's fourth-largest bank, which has high exposure to bad property loans. The government is hoping to convince investors that Spain won't need a bailout.

"Europe's problems are by no means being solved. But the feeling that there is some support there probably helps sentiment a little bit," said Ed Hyland, a global investment specialist with J.P. Morgan Private Bank.

The news helped U.S. financial stocks, which would be vulnerable to an increase in financial stress in Europe. Citigroup rose 1.3 percent and JPMorgan Chase rose one-half percent.

European stocks rose. Spain's IBEXC 35 index jumped 3.4 percent on the Bankia news and a drop in Spain's borrowing costs. Britain's FTSE 100 closed 0.3 percent higher, and Germany's DAX rose 0.7 percent.

Other U.S. stocks on the move:

— Pfizer rose 1.8 percent after the drugmaker got preliminary approval for an arthritis drug.

— Avon fell 5.3 percent after beauty products maker Coty Inc. raised its offer to buy Avon but also said it will withdraw the latest bid if it doesn't get a response by the close of business Monday. Some analysts have been saying Avon is worth more.

— Kohl's fell 3.8 percent after price-cutting led to a 23 percent drop in its first-quarter profit.

Oil prices rose 26 cents to $97.07 per barrel.

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