Stocks set to continue rally ahead of jobs report

[September 09, 2010]  NEW YORK (AP) -- Stock prices were set to continue their rally Thursday as investors prepare for a new report that is expected to show unemployment claims fell for the third straight week.

The Labor Department is expected to report people requesting unemployment benefits for the first time dipped by 2,000 last week to 470,000. The report was due out at 8:30 a.m. EDT.

Claims are still at levels that indicate the jobs market is weak and rapid hiring is unlikely anytime soon. But investors have taken solace in modest improvements recently 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.

But stocks have rallied since the beginning of the month as economic indicators have shown mild improvements. Last week's monthly employment report showed private employers hired more workers in August than expected, which helped drive stocks higher.

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.

Ahead of the opening bell, Dow Jones industrial average futures rose 34, or 0.3 percent, to 10,4262. Standard & Poor's 500 index futures rose 3.80, or 0.4 percent, to 1,103.10, while Nasdaq 100 index futures rose 7.25, or 0.4 percent, to 1,884.75.

That Dow has gained 3.7 percent since the beginning of September. 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.

After some European nations successfully auctioned new debt this week, those worries have dissipated. Britain's FTSE 100 rose 0.8 percent, Germany's DAX index gained 0.5 percent, and France's CAC-40 rose 0.8 percent.

There were concerns during the spring that mounting European debt would stunt a global recovery. Stocks fell sharply through much of the spring because of those worries.

Meanwhile, bond prices traded in a tight range. The yield on the 10-year Treasury note, which moves opposite its price, rose to 2.67 percent from 2.66 percent late Wednesday. Its yield is often used to help set interest rates on mortgages and other consumer loans.

[Associated Press; By STEPHEN BERNARD]

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