NEW YORK Better news on jobs and consumer spending -- along with some soothing words from a Fed official -- pushed U.S. stocks higher early Thursday.
The Dow Jones industrial average rose 114 points to 15,024, its third jump in as many days. The Standard & Poor's 500 index climbed 9 points to 1,613. The Nasdaq composite rose 25 points, or 1 percent, to 3,401.
The yield on the 10-year Treasury note fell to 2.47 percent from 2.54 percent. The yield climbed as high 2.66 on Monday, its highest since August 2011. The rate has surged since May 3, when it touched its low for the year of 1.63 percent. Concern that the Fed is poised to start pulling back on its stimulus prompted investors to sell bonds, pushing the yield higher. A higher yield on the note translates to higher borrowing costs on many kinds of loans including home mortgages.
Consumer spending rose 0.3 percent last month as incomes increased at the fastest pace in three months, the government reported. The number of Americans seeking unemployment benefits fell 9,000 to 346,000 last week. The report added to evidence that the job market is improving modestly.
The stock market has rallied in the last three days as investors took advantage of lower prices after a sell-off last week that stretched into Monday. The plunge came after Federal Reserve Chairman Ben Bernanke said that the central bank could cut back on its stimulus later this year and possibly end it next year, if the economy continued to improve. The central bank is buying $85 billion of bonds every month to hold down long-term interest rates and encourage spending. The stimulus has underpinned a stock market rally that started in March 2009 by encouraging investors to put money into risky assets.
Today another Fed official offered up some soothing words about quantitative easing. William Dudley, head of the New York Federal Reserve, said in a speech that the Fed bond buying would continue or even intensify depending on what economic conditions warrant.
"What's driving that market up is that people are realizing that they are in a 'win-win' situation," said Rick Robinson, a regional Chief Investment Officer at Wells Fargo Private Bank. "If you have good economic data that should be good for stocks, if you have poor economic data....that means the Fed will probably have its (stimulus) longer."
In commodities trading, the price of oil rose $1.54 to $97.08 a barrel. Gold, after recovering early in the session, resumed its plunge, losing $31 to $1,198 per ounce. With little inflation in sight, many analysts are predicting that the metal still has farther to fall.