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Stocks' gains erase losses from past week

Traders work on the floor of the New

Traders work on the floor of the New York Stock Exchange at the start of the trading day in Manhattan on Jan. 7, 2015. Credit: EPA / Justin Lane

The stock market is bouncing back from a tough start to the year.

Investors sent shares sharply higher for a second straight day Thursday, erasing losses from the first few days of 2015.

The gains were driven by a combination of positive economic news from the U.S. and hopes for economic stimulus in Europe. The price of oil has also been stabilizing after six months of heavy losses.

KEEPING SCORE: At the close on Wall Street, The Dow Jones industrial average was up 323.4 points, or 1.84 percent, at nearly 17,908. The Dow rose 212 points Wednesday. The Standard & Poor's 500 index gained 36.2 points, about 1.8 percent, to 2,062.1. The Nasdaq composite added 85.7 points, or 1.8 percent, to 4,7326.2.

Bond prices fell. The yield on the 10-year Treasury note rose to 2.01 percent.

JOBS OUTLOOK: Fewer Americans applied for unemployment benefits last week, a sign that employers expect the economy to keep growing, requiring them to hold on to workers. The U.S. Labor Department said Thursday that applications for unemployment benefits fell 4,000 last week to a seasonally adjusted 294,000.

Economists forecast that a government report Friday will show that U.S. employers added 243,000 jobs last month.

EUROPE BOOST: Markets continued to rise a day after European data showed consumer prices fell in December for the first time since 2009. That increases pressure on the European Central Bank to provide more stimulus for the region's flagging economy. Many analysts expect the bank to announce a plan this month to buy European government bonds in an attempt to hold down long-term interest rates and stimulate borrowing and spending.

ENERGY: U.S. crude oil was stable Thursday after falling to its lowest in nearly six years earlier in the week. The plunge in oil prices the past three months has unnerved markets as it suggests weakness in the global economy. Part of the fall, however, is due to oversupply as energy companies maintain production levels to avoid losing market share. Benchmark U.S. crude closed Thursday at $48.72 a barrel on the New York Mercantile Exchange. It rose 72 cents to close at $48.65 on Wednesday. The price of oil has fallen by more than half since June.

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