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U.S. stocks rally after rough start to year

The Columbian
Published: January 7, 2015, 4:00pm

NEW YORK (AP) — The stock market is bouncing back from a tough start to 2015.

Investors bid shares up sharply for a second straight day Thursday, erasing losses from the first few days of the year.

The gains were driven by a combination of positive economic news from the U.S. and hopes for stimulus from Europe’s central bank. The price of oil is also showing signs of stability after six months of heavy losses.

KEEPING SCORE: The Standard & Poor’s 500 index climbed 35 points, or 1.8 percent, to 2,061 as of 3:48 p.m. Eastern time. The gains eliminated the index’s losses for the year. The Dow Jones industrial average rose 302 points, or 1.7 percent, to 17,885. The Nasdaq composite jumped 85 points, or 1.8 percent, to 4,735.

JOBS OUTLOOK: Fewer Americans applied for unemployment benefits last week, a sign that employers are holding on to more of their employees as they expect the economy to keep growing. The Labor Department said Thursday that applications for unemployment benefits fell 4,000 last week to 294,000.

Economists forecast that a government report today will show that U.S. employers added 243,000 jobs last month.

EUROPE BOOST: Markets continued to rise a day after European data showed that consumer prices fell in December for the first time since 2009. That increased pressure on the European Central Bank to provide more stimulus for the region’s flagging economy. Many analysts expect the bank to announce a plan this month to buy European government bonds to hold down long-term interest rates and stimulate borrowing and spending.

THE REBOUND: After two days of strong gains, the stock market regained the big losses that it made in the first few trading days of the year. The Dow lost 460 points in the first two days of this week.

Minutes of the Federal Reserve’s December meeting, released Wednesday, show that Fed officials believed stagnant global growth posed one of the biggest downside risks to the U.S., particularly if it triggered turmoil in global financial markets or if any policy moves abroad proved ineffective.

THE QUOTE: The minutes were a clarification of the Federal Reserve’s “persistent message” that it would do all that it could to support not just the U.S. economy, but also the global economy, said Marc Zabicki, senior market strategist at Ameriprise Financial.

“That reference and that understanding, and that global view of the Federal Reserve, has been a boon to equities today,” he said.

ENERGY: The price of U.S. crude oil was stable after falling to its lowest in nearly six years earlier this week. The plunge in oil the past three months has unnerved markets because it suggests weakness in the global economy.

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