NEW YORK - Stocks moved higher in midday trading Thursday as Wall Street went back to work after the Christmas holiday.
The yield on the 10-year Treasury
note, a benchmark for many kinds of loans, crossed above the psychologically
important 3 percent mark. It hasn't been that high since September.
Traders were encouraged by an
unexpectedly large drop in claims for unemployment benefits last week, the
latest sign that the U.S. job market is improving.
The Dow Jones
industrial average rose 74 points, or 0.5 percent, to 16,431 as of 12:05 p.m. ET. The Standard & Poor's 500 index rose six points, or 0.3
percent, to 1,839 and the Nasdaq composite was up eight points, or 0.2 percent,
The yield on the 10-year Treasury note rose to 3 percent from 2.98 percent Tuesday. Bond yields have been climbing since late November as economic reports have suggested that the U.S. recovery is gaining momentum. The increase accelerated last week after the Federal Reserve announced it was cutting back on its bond-buying program. The yield last touched 3 percent in September. It hasn't been consistently above 3 percent since July 2011.
"There's a silver lining to see bond yields rise like this, because it's a sign that the economy is getting stronger," said John De Clue, chief investment officer of U.S. Bank Wealth Management.
Yields on Treasury securities like the 10-year note are used to calculate interest rates on student loans, mortgage rates, credit cards, and many other kinds of debt. As the 10-year yield has risen in the last six months, so have mortgage rates. In early May, the average mortgage rate was around 3.35 percent. This week it was 4.48 percent, according the government mortgage agency Freddie Mac.
The number of Americans who filed for unemployment benefits fell 42,000 last week to 338,000. The drop was far bigger than economists were expecting and an indication that fewer people were losing their jobs.
T-Mobile rose 21 cents, or 1 percent, to $32.40 after The New York Times and other news outlets reported that the Sprint division of Japan's Softbank was looking to buy the wireless carrier.
Twitter shares rose $2.88, or 4 percent, to $72.83. The stock is up 22 percent this week alone and 75 percent so far this month. Investors continue to bid up Twitter's shares on optimism the social media company can increase profits from mobile advertising.
The New York Stock Exchange and the Nasdaq Stock Market are operating on a regular schedule Thursday after being closed Wednesday in observance of Christmas. Trading is light since many investors have already closed out their books for 2013.