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Better job market news sends US stocks higher

December 22nd, 2011 10:12 am by PALLAVI GOGOI

Better job market news sends US stocks higher

NEW YORK (AP) — Encouraging economic numbers are sending stocks higher in early trading Thursday. The number of people applying for unemployment benefits dropped last week to the lowest level since April 2008, the latest sign that the job market is healing.

The Dow Jones industrial average rose 30 points, or 0.3 percent, to 12,137 in the first half-hour of trading. The S&P 500 index rose 5 points, 0.4 percent, to 1,249. The Nasdaq was up 11, or 0.4 percent, at 2,589.

Applications for unemployment benefits fell 4,000 to 364,000, the Labor Department said Thursday. It was the third straight weekly drop.

The government also lowered its estimate of U.S. economic growth in the July-September quarter to an annual rate of 1.8 percent from 2 percent. That was still the fastest growth this year, up from 1.3 percent in the April-June quarter.

Economists think the improving job market, strong holiday shopping, and cheaper gas prices will leave consumers with more money to spend. That would get the economy growing at an annual rate of more than 3 percent in the final three months of this year, which would be the fastest pace since 3.8 percent growth in the spring of 2010.

In corporate news:

— Mead Johnson Nutrition Co. plummeted 11 percent, the most in the S&P 500, on news that Wal-Mart Stores Inc. pulled a batch of its powdered infant formula from more than 3,000 of its stores nationwide. A newborn Missouri boy was fed a batch of the Enfamil Newborn powder made by Mead and died from what preliminary tests indicate was a rare bacterial infection.

— Tibco Software Inc. jumped 7 percent after the business software maker reported a 20 percent increase in revenue and net income that was far ahead than what Wall Street analysts were expecting.

— Bed, Bath & Beyond Inc. slid 5 percent after the retailer warned investors that its fourth-quarter earnings might be lower than analysts had expected. Third-quarter sales also fell below analysts' expectations.

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