The report, which showed a drop of 34,000 filings last week, was one of several released Wednesday that provider traders with some optimism about the economy and helped push Wall Street index up about 1 percent.
Less than two hours before the close, the Dow Jones industrial average was up 137.48 points, or 1.25 percent. The broader Standard & Poor’s 500-stock index rose 15.67 points, or 1.3 percent, while the Nasdaq composite index rose 45.97 points, or 1.8 percent.
The move toward more risk pushed Treasury prices lower and yields higher. The yield on the 10-year note was 2.91 percent up to 2.85 percent from 2.77 percent Tuesday.
All three equity indexes had declined more than 1 percent on Tuesday, sent lower by the uncertainty related to the tensions between North and South Korea and the European debt crisis.
The Labor Department said Wednesday that filings for first-time unemployment benefits declined to 407,000 in the week ended Nov. 20, down from a revised 441,000 the previous week and well below analysts’ forecasts of 435,000.
More important, economists said, an average calculated over four weeks of the data has declined to 436,000, the lowest reading since July 2008 and during the recovery, economists said. The figures are often volatile, but the average smoothes the distortions caused by seasonal variations.
Ryan Wang, the United States economist for HSBC, said the trend lower in claims has been “long enough and significant enough to really pay attention to.”
“So it may be a sign that we are going to start to see some stronger job growth in the months ahead,” Mr. Wang said. “If we continue to see claims trend lower, it is a sign that we can finally see some positive progress.”
Within the reports, analysts saw indications that the consumer sentiment was picking up. The Department of Commerce said personal income rose 0.5 percent in October, while spending was up 0.4 percent and the savings rate rose to 5.7 percent from 5.6 percent last month, in line with expectations.
“Rising savings and rising consumption spending are constructive signs,” Steven Ricchiuto, the chief United States economist for Mizuho Securities, said in a research note.
In addition, the Thomson Reuters/University of Michigan index on consumer sentiment rose to 71.6 this month, from 67.7 the previous month.
But reasons for concern remain. The survey showed weaker expectations by consumers of inflation and the job market.
“While consumers clearly believe that the recovery has gained some traction, most still think that the economic gains will be too small to improve their own job and income position anytime soon,” said Richard Curtin, the survey’s chief economist said.
Still, the S.&P.’s consumer discretionary sector was up more than 1.8 percent on Thursday.
Steven Ricchiuto, the chief United States economist for Mizuho Securities, said that a dip in the unemployment claims level below 400,000 could mean an increase in national payrolls to about 200,000, which is “big enough to begin pulling the jobless rate lower.”
The weekly claims figures are often used to estimate any impact on the national unemployment rate, which is currently 9.6 percent.
Mr. Wang said a further decline in claims below the 400,000 mark could be a sign that job growth is accelerating toward the pace need to meet new Federal Reserve forecasts. Fed officials revised their forecasts early this month and now believe unemployment could exceed 9 percent in 2011 and 8 percent in 2012.
On the downside, a report for orders of durable goods report came in below expectations, falling 3.3 percent in October after an upward revised 5 percent the previous month. Excluding transportation, durable orders fell 2.7 percent in October, the Commerce Department said. Shipments were down 0.9 percent while inventories rose 0.4 percent, a ratio that economists from Goldman Sachs said in a research report suggested a slowdown in growth.
In another closely watched sector, housing sales slipped in October. According to government figures for October, new home sales showed a declineof 8.1 percent to a seasonally adjusted annual rate of 283,000, compared with 308,000 in September.
The October rate fell below expectations by analysts of 312,000.
The decline in sales was felt across most regions of the country, with a nearly 24 percent decline in sales in the West; 20.4 percent declines in the Midwest and a 12.1 drop in the Northeast.
The supply of homes for sale fell to 202,000 units — the lowest since June 1968 — compared with 203,000. Median home prices were at their lowest levels since October 2003, falling to $194,900 from $226,300 a month earlier.
“The sales numbers should improve starting in early 2011 because the economy is starting to generate new jobs,” the United States economist for IHS Global Insight, Patrick Newport, said.
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