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November 03, 2011 at 08:27 AM
NEW YORK (AP) — Signs of growth in the U.S. economy combined with an unexpected interest rate cut in Europe to send the Dow Jones industrial average up more than 100 points for the second day in a row.
The European Central Bank surprised markets early Thursday by cutting its benchmark interest rate a quarter of a percentage point, to 1.25 percent. The bank had increased its key rate twice this year, but that was before Mario Draghi took over as head of the bank this week. The announcement sent European stock indexes modestly higher as investors hoped that lowering borrowing costs would help prevent a recession in Europe.
Reports on the U.S. economy also lifted stocks. The number of people who applied for unemployment benefits last week dipped to the lowest level in five weeks. The number of applications fell below 400,000 for only the third time since April. That’s a sign layoffs are easing. Companies also made more orders to U.S. factories in September.
The Dow Jones industrial average gained 107 points, or 0.9 percent, to 11,943 as of noon Eastern. The S&P 500 rose 10, or 0.8 percent, to 1,247. The Nasdaq composite added 24, or 0.9 percent, to 2,664.
Despite the signs of growth, many investors were still focused on Europe’s debt problems. Greece’s prime minister shocked investors with a call this week to put a European rescue package to a vote. The prime minister was in an emergency meeting Thursday after members of his government called for him to step down. Many investors hope that a new government would approve the rescue package without a referendum.
Companies reporting quarterly earnings were among those making the biggest gains.
