Dow surges on upbeat earnings reports

NEW YORK (AP) — Stocks have surged higher after another series of upbeat earnings reports and a reading on unemployment provided more evidence of an improving economy.

The Dow Jones industrials rose 122 points Thursday after the Labor Department said initial claims for unemployment benefits fell last week. And companies including Motorola, Time Warner Cable and Starwood Hotels & Resorts reported earnings that topped analysts’ forecasts.

According to preliminary calculations, the Dow rose 122.05, or 1.1 percent, to 11,167.32. The Standard & Poor’s 500 index rose 15.42, or 1.3 percent, to 1,206.78, while the Nasdaq composite index rose 40.19, or 1.6 percent, to 2,511.92.

It was the market’s second straight winning day after a plunge Tuesday that took the Dow down 213. Greece’s debt problems, one of the triggers for that slide, appeared less dire Wednesday, and that allowed investors to focus on the growing signs of healing in the US.

The Labor Department said first-time claims dipped to 448,000, slightly above analysts’ forecast of 445,000, according to Thomson Reuters. It was the second weekly drop and lifted hopes that layoffs are slowing.

Dealmaking and strong corporate earnings reports added to the growing optimism in the market.

Hewlett-Packard Co. said late Wednesday it is buying smart phone maker Palm Inc. in an all-cash deal worth $1.4 billion. Acquisitions are a sign that the economy is recovering and companies are comfortable spending cash to build their businesses.

“Business are in a very strong position financially,” said Doug Lockwood, chief investment officer at Cornerstone Wealth Management in Auburn, Indiana. Companies have built up big cash reserves that can not only go toward deals, but also eventually to hire back workers, Lockwood said.

Companies including Motorola, Time Warner Cable and Starwood Hotels & Resorts reported earnings that topped analysts’ expectations, as have many other companies that announced first-quarter results in recent weeks.