NEW YORK — Wall Street rallied Thursday after the government’s jobless claims data and Ford Motor Co.’s first-quarter results helped reinject some optimism about the economy into the market.
The Dow Jones industrial average rose more than 80 points as investors focused on the Labor Department data showing weekly unemployment claims dropped and word that Ford had a $100 million profit in the first quarter. The news allowed investors to look past the Commerce Department’s report that sales of new homes fell in March to the lowest level in more than 16 years, a sign that the housing slump isn’t close to an end.
Investors were also able to set aside concerns about another drop in factory orders for big-ticket manufactured goods and weak forecasts from Inc. and Starbucks Corp. Meanwhile, oil and other commodities prices fell as the dollar rose to its highest level against major currencies since January, which also helped boost stocks.
Sellers held sway early in the session, sending the Dow down nearly 57 points, after the home-sales report. The data appeared to stir concerns that the hangover from the housing bubble would remain an intractable obstacle for the economy. But as the session wore on, the market righted itself, perhaps because there were no real surprises in the day’s negative news.
John Merrill, chief investment officer at Tanglewood Capital Management in Houston, said investors are seeing confirmation of many of the economic themes that have played out in recent months, with weakness in the financial, homebuilding and automotive sectors and relative strength elsewhere.
“The earnings picture is not so bleak as people thought it was going to be,” he said. “There’s been so much talk of the spillover from the credit crunch and homebuilding into the real economy and that just doesn’t seem to have happened.”
The Dow rose 85.73, or 0.67 percent, to 12,848.95.
Broader stock indicators also gained. The Standard & Poor’s 500 index rose 8.89, or 0.64 percent, to 1,388.82, and the Nasdaq composite index advanced 23.71, or 0.99 percent, to 2,428.92.
The dollar rose for the second straight day, regaining ground from its record low against the euro on Tuesday amid rising expectations that the Federal Reserve will pause in its string of interest-rate cuts after its meeting next Wednesday. The euro brought $1.5686 in late New York trading, down from $1.5896 Wednesday and $1.6018 on Tuesday.
