Jobless claims dip boosts US stocks

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The Dow Jones industrial average closed on Thursday up 41.78 at 11,499.25

A small drop in unemployment claims and a higher profit forecast by FedEx helped push US stocks up and saw the Dow Jones industrial average and the Standard&Poor’s 500 index close at their highest levels of the year.

The Labour Department said first-time claims for unemployment benefits fell last week to 420,000, the third drop in four weeks. The four-week average of claims also slid for the sixth week in a row, reaching the lowest level since July 2008. That was before Lehman Brothers collapsed and markets seized up at the height of the financial crisis.

Separately, the US Commerce Department said housing starts rose slightly last month, reversing a two-month decline.

Card companies fell sharply after the Federal Reserve proposed as 12-cent cap on the fees that merchants pay every time a customer uses a debit card. Merchants now pay a fee that ranges between 1-2% of each transaction.

The proposal could cut revenues for major banks and card networks like Visa and MasterCard. Visa fell 12.7% to 67.19 US dollars (£42.98). MasterCard fell 10.3% to 223.49 US dollars (£142.96)

FedEx rose 1.9% to 94.22 US dollars (£60.27) after the company raised its earnings predictions for next year because businesses and consumers are shipping more packages. Traders took that as a sign that the economy is improving.

The Dow Jones industrial average rose 41.78, or 0.4%, to end Thursday on 11,499.25. The broader Standard&Poor’s 500 index rose 7.64, or 0.6%, to 1,242.87. The Nasdaq composite rose 20.09, or 0.8%, to 2,637.31.

Gains came across the market, and all 10 company groups in the Standard and Poor’s 500 index rose.

Alcoa was the biggest gainer of the 30 stocks that make up the Dow index, rising 3.5% to 14.45 US dollars (£9.24). American Express fell the most, losing 3.4% to 44.57 US dollars (£28.51)

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