Stocks climb after Alcoa report, better jobs data

NEW YORK — Stocks have resumed their climb after Alcoa kicked off earnings season with an unexpected profit and the government reported a drop in initial claims for jobless benefits.

Several big retailers, meanwhile, are reporting better sales for September than the market had anticipated.

Aluminum company Alcoa Inc. surprised investors after the market closed Wednesday with its first profit in nine months, which the company attributed to cost-cutting and rising sales to automakers. Alcoa also said it expects worldwide aluminum demand to increase 11 percent in the second half of the year.

Traditionally the first major company to report earnings, Alcoa’s better-than-expected report and upbeat demand prediction reassured investors.

“Alcoa set the tone and backed it up,” Michael Feser, president of Zecco Trading said.

A better reading on the troubled labor market also stoked investors’ optimism about the economy. The Labor Department reported that new claims for jobless benefits fell to 521,000 last week, down from 554,000 the previous week and better than analysts had expected. It was the lowest level since early January. Continuing claims fell to 6.04 million, better than the slight increase analysts had expected.

The stock market’s early gains were held in check, however, by a mixed report on business inventories. The Commerce Department said wholesale inventories fell 1.3 percent in August, worse than the 1 percent drop economists had expected. In an encouraging sign, sales jumped by the largest amount in 14 months.

In early trading, the Dow Jones industrial average rose 36.65, or 0.4 percent, to 9,762.23. The Standard & Poor’s 500 index rose 3.60, or 0.3 percent, to 1,061.18, while the Nasdaq composite index rose 7.51, or 0.4 percent, to 2,117.84.

More than two stocks rose for every one that fell on the New York Stock Exchange, where volume came to 144.6 million shares, compared with 177.1 million at the same time a day earlier.

In other trading, the Russell 2000 index of smaller companies rose 4.17, or 0.7 percent, to 606.25.

Earnings will be the market’s key focus in the coming weeks, with investors looking for the reports to provide more signs of growth. Companies mostly beat modest earnings expectations during the second quarter because of cost-cutting measures, and investors now want to see actual revenue growth as a driver of profits.

“We have to see earnings above and beyond cost-cutting,” Feser said.

New data from retailers shows sales are still falling, but still managing to beat expectations. Teen retailer Wet Seal Inc. and Macy’s Inc. reported smaller-than-expected declines in sales at stores opened at least a year. Wet Seal rose 17 cents, or 4.8 percent, to $3.70, while Macy’s added 21 cents to $18.80.

Alcoa shares jumped nearly 4 percent in early trading, gaining 55 cents to $14.75.

Bond prices were mixed. The yield on the benchmark 10-year Treasury note fell to 3.17 percent from 3.19 percent late Wednesday. The yield on the three-month T-bill rose to 0.07 percent from 0.05 percent.

The dollar fell further against other currencies, helping to send gold prices higher. Gold hit another new record Thursday, rising as high as $1,059.60 an ounce.

Oil prices dipped 8 cents to $69.49 a barrel on the New York Mercantile Exchange.

Overseas, Japan’s Nikkei stock average rose 0.3 percent. In afternoon trading, Britain’s FTSE 100 gained 0.4 percent, while Germany’s DAX index and France’s CAC-40 each jumped 0.8 percent.