updated 12/16/2010 4:55:53 PM ET 2010-12-16T21:55:53

A small drop in unemployment claims and a higher profit forecast by FedEx Corp. helped push stocks up Thursday. The Dow Jones industrial average and the Standard & Poor's 500 index closed at their highest levels of the year.

The Labor Department said first-time claims for unemployment benefits fell last week to 420,000, the third drop in four weeks. The four-week average of claims also slid for the sixth straight week, reaching the lowest level since July 2008. That was before Lehman Brothers collapsed and markets seized up at the height of the financial crisis.

Major Market Indices

Separately, the Commerce Department said housing starts rose slightly last month, reversing a two-month decline.

Card companies fell sharply after the Federal Reserve proposed as 12-cent cap on the fees that merchants pay every time a customer uses a debit card. Merchants now pay a fee that ranges between 1 to 2 percent of each transaction.

The proposal could cut revenues for major banks and card networks like Visa Inc. and MasterCard Inc. Visa fell 12.7 percent to $67.19. MasterCard fell 10.3 percent to $223.49.

FedEx Corp. rose 1.9 percent to $94.22 after the company raised its earnings predictions for next year because businesses and consumers are shipping more packages. Traders took that as a sign the economy is improving.

Story: Jobless claims data point to improvement

The Dow Jones industrial average rose 41.78, or 0.4 percent, to 11,499.25. The broader Standard & Poor's 500 index rose 7.64, or 0.6 percent, to 1,242.87. The Nasdaq composite rose 20.09, or 0.8, to 2,637.31.

Gains came across the market. All 10 company groups in the Standard and Poor's 500 index rose.

Alcoa Inc. was the biggest gainer of the 30 stocks that make up the Dow index, rising 3.5 percent to $14.45. American Express Co. fell the most. The company lost 3.4 percent to $44.57.

A bill to extend Bush-era tax cuts along with unemployment benefits was postponed by the House of Representatives Thursday afternoon. The Senate passed the bill Wednesday. The tax package, a compromise between the White House and Senate Republicans, is expected to boost economic growth next year but also widen the budget deficit.

Quotes delayed 15+ min.

House Democratic leaders say they'll pass the bill, but only after first voting whether to raise the proposed rate for the estate tax.

The yield on the 10-year Treasury fell to 3.45 percent from 3.53 percent the day before. Investors have been selling Treasurys as their outlook on the economy improves, sending yields on the bonds higher. The 10-year yield traded as low as 2.49 percent as recently as Nov. 4.

The dollar fell 0.2 percent against an index of six heavily traded currencies. Gold fell 1.1 percent.

© 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


Discussion comments


Most active discussions

  1. votes comments
  2. votes comments
  3. votes comments
  4. votes comments

Data: Latest rates in the US

Home equity rates View rates in your area
Home equity type Today +/- Chart
$30K HELOC FICO 3.79%
$30K home equity loan FICO 4.99%
$75K home equity loan FICO 4.69%
Credit card rates View more rates
Card type Today +/- Last Week
Low Interest Cards 13.83%
Cash Back Cards 17.80%
Rewards Cards 17.18%
Source: Bankrate.com