By Ken Sweet, contributing writerMarch 3, 2011: 11:00 AM ET
NEW YORK (CNNMoney) — U.S. stocks posted solid advances Thursday, fueled by the news that initial unemployment claim filings fell to their lowest level in nearly three years.
Investors said Thursday’s gains was fueled by the weekly jobless claims report, which showed the number of people who filed for unemployment benefits falling to its lowest level since May 2008.
“It’s giving the market a lot of optimism going into tomorrow’s non-farm payrolls report,” said John Dickson, chief market strategist at D.A. Davidson & Co.
Dickson also noted the relative calm in the oil markets — crude oil was down 90 cents a barrel in mid-morning trading — was also providing a boost to the market. Oil was down on news reports that Libyan leader Muammar Gadhafi might agree to a peace negotiations mediated by Venezuela’s Hugo Chavez.
U.S. stocks ended slightly higher Wednesday in a rebound from the previous session’s sell-off. But nervous investors focused on oil prices, which rose above $102 a barrel on renewed concerns about supply and the Libyan conflict.
Economy: The Labor Department reported that initial jobless claims totaled 368,000 in the week ended Feb. 26 — the lowest weekly figure since May 31, 2008.
Analysts surveyed by Briefing.com had expected the number of people filing for unemployment benefits to rise to 400,000 from the revised tally of 388,000 the previous week.
The report came a day before the big labor report, the monthly employment figures from the government. Economists surveyed by CNNMoney expect that 192,000 jobs were created in February, with the unemployment rate rising to 9.1% from 9% in January.
The Institute for Supply Management’s service industries index was also a positive force for the markets, rising to a stronger-than-expected reading of 59.7 for February. Economists had been looking for a reading of 59. Any reading above 50 signals expansion in the sector.
Companies: Valero Energy (VLO, Fortune 500) shares jumped 5.5% Thursday after the oil refining company said it now expects to post adjusted earnings between 76 cents and 91 cents a share, well ahead of the 48 cents a share analysts were looking.
World markets: European stocks were higher in late-day trading. Britain’s FTSE 100 rose 1.4%, the DAX in Germany ticked up 0.9% and France’s CAC 40 added 0.6%.
Asian markets ended mixed. The Shanghai Composite slipped 0.4%, while the Hang Seng in Hong Kong edged higher 0.3% and Japan’s Nikkei gained 0.9%.
Oil for April delivery slipped 95 cents to $101.30 a barrel.
Gold futures for April delivery fell $17.80 to $1,420 an ounce. On Wednesday gold hit an intraday all-time high of $1,441 an ounce, before setting a settlement record of $1,437.70.
Bonds: The price on the benchmark 10-year U.S. Treasury fell, pushing the yield up to 3.52% from 3.46% late Wednesday.
First Published: March 3, 2011: 9:43 AM ET
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Stocks soar on jobs optimism