Stocks Continue Rally on Jobless Drop  09/09 09:23

   Stocks extended their September rally Thursday after another report showed 
modest improvement in the job market.

   NEW YORK (AP) -- Stocks extended their September rally Thursday after 
another report showed modest improvement in the job market.

   The Dow Jones industrial average, up 81 points in early morning trading, 
moved back into positive territory for the year after the Labor Department said 
first-time claims for unemployment benefits fell to the lowest level in two 
months, adding to signs that employers aren't resorting to staff cuts as 
economic growth slows. Broader indexes also rose and Treasury prices dipped on 
the better-than-exected report.

   First-time claims fell to 451,000 last week from a revised 478,000 a week 
earlier. Economists had been expecting claims to fall to 470,000, according to 
Thomson Reuters.

   Claims are still at levels that indicate the jobs market is weak and rapid 
hiring isn't likely anytime soon. But investors have taken solace in recent 
improvements in employment data that suggest the economy will continue to grow 
slowly during the rest of the year. Traders concerned about the potential for 
the economy falling back into recession drove stocks lower throughout August.

   Stocks have rallied since the beginning of the month as economic indicators, 
including the Labor Department's monthly employment report, have been better 
than forecast.

   Employment reports have become investors' primary focus recently because 
without robust hiring, the economy is likely to remain sluggish. People worried 
about their jobs have cut back on spending, which further slows the recovery. 
When the economy is growing rapidly and companies are hiring, weekly requests 
for unemployment benefits fall below 400,000.

   In early morning trading, the Dow rose 81.05, or 0.8 percent, to 10,467.99. 
The Standard & Poor's 500 index rose 10.92, or 1 percent, to 1,109.79, while 
the Nasdaq composite index rose 20.48, or 0.9 percent, to 2,249.35.

   The Dow had already jumped 3.7 percent in September heading into trading 
Thursday. Stocks have climbed all but one day so far this month. Major indexes 
took a pause from the recent rally on Tuesday when worries about European 
government debt problems flared up early in the week.


(KM)