Thursday, Nov 10, 2011

("US Stocks Open Higher As Jobs Data, Cisco Lift Sentiment," published at 9:48 a.m., misstated the Dow Jones Industrial Average in the second paragraph. A corrected version follows.)

--Stocks rebound after yesterday's sharp selloff

--Jobless claims drop to lowest level in seven months

--Cisco shares gain as company's turnaround may be working 


 
   By Steven Russolillo 
   Of DOW JONES NEWSWIRES

NEW YORK -(Dow Jones)- U.S. stocks opened higher, rebounding from sharp losses a day earlier, as hope for the beleaguered labor market and strong results from Cisco Systems helped lift investor sentiment.

The Dow Jones Industrial Average gained 119 points, or 1%, to 11900, in early Thursday trading. The gains came after the blue-chip Dow slumped 389 points on Wednesday, its biggest decline since Sept. 22 and sixth largest fall this year.

The Standard & Poor's 500-stock index hiked up 13 points, or 1.1%, to 1242, led higher by energy and industrial stocks. The technology-oriented Nasdaq Composite rose 22 points, or 0.9%, to 2644.

Cisco ran up 5.5% after the blue-chip networking company reported fiscal first-quarter earnings and revenue that exceeded expectations. An upbeat outlook also offered early evidence that the networking equipment company's turnaround effort may be working.

Stocks got a boost after a reading on unemployment claims offered hints of progress in the feeble labor market. The number of people filing applications for jobless claims dropped last week by 10,000 to a seasonally adjusted 390,000, the lowest level in seven months.

European stocks erased early losses to turn higher, with the Stoxx Europe 600 up 0.4% after being down as much as 1.5% at its intraday low. Yields on 10-year Italian bonds have come off their highs amid trader talk that the European Central Bank was buying Italian government bonds.

Investors were optimistic that a key Italian economic bill would be approved by the weekend, which would help stem the government's rising borrowing costs and pave the way for Prime Minister Silvio Berlusconi to resign. Investors also felt some relief after word came that Greece named Lucas Papademos as its new prime minister.

"We're getting a reminder from Cisco's orders and better employment data that the U.S. economy is proceeding with 'okay' growth," said Jim McDonald, chief investment strategist at Northern Trust. "In Europe, politicians appear to be behaving after being scolded by the markets yesterday. All of this sets the stage for a snapback rally."

Asian bourses suffered steep losses, with Japan's Nikkei Stock Average shedding 2.9% and Hong Kong's Hang Seng plunging 5.3%.

Gold futures dropped below $1,773 an ounce, while crude oil futures rose above $97 a barrel. The U.S. dollar fell against the euro and the yen.

Green Mountain Coffee Roasters slumped 29% after the company's fiscal fourth-quarter revenue missed the company's forecasts and Wall Street's targets.

Kohl's tacked on 2.7%. The department-store's fiscal second-quarter profit rose 20% on continued sales growth and as its focus on private and exclusive brands helped boost margins.

Advance Auto Parts gained 5.3% after the auto parts retailer's fiscal third-quarter profit rose 20%. The company also boosted its full-year earnings outlook.

Viacom's fiscal fourth-quarter results beat forecasts, and the entertainment company said it was expanding its stock repurchase program to $10 billion from $4 billion. The stock rose 4.2%.

-By Steven Russolillo, Dow Jones Newswires; 212-416-2180; steven.russolillo@dowjones.com

(END) Dow Jones Newswires

November 10, 2011 10:16 ET (15:16 GMT)