NEW YORK — The Dow Jones industrial average jumped 183 points Thursday after the European Central Bank moved to support that region’s lenders and U.S. retailers reported stronger September sales.
It was the third straight day of gains. The Dow has soared 434 points since Tuesday.
The European Central Bank promised to provide unlimited one-year loans to the region’s lenders through 2013. The goal is to shield banks from poorly functioning short-term credit markets, in which banks are becoming too worried about one another’s financial stability to lend money to others. Germany’s DAX jumped 3.2 percent, and France’s CAC-40 rose 3.4 percent.
The loans also are meant to help protect the banks in the event Greece’s government defaults on its debt. If that happens, the value of Greek bonds held by those banks would probably drop sharply, weakening the banks’ balance sheets and making it harder for them to lend.
Target, Nordstrom, Macy’s and other U.S. retailers reported sales that beat Wall Street’s expectations. While some of the sales were driven by deep discounts, analysts said higher sales suggests the U.S. economy is not in another recession.
“The market has been pricing in an out-and-out recession, but the fact that consumer spending is holding up shows that we’re more likely to continue muddling through at a 1 to 2 percent growth rate,” said Brian Gendreau, market strategist at Cetera Financial Group.
The Dow jumped 183.38 points, or 1.7 percent, to 11,123.33. It was the first time the Dow rose by more than 100 points for three straight days since a rally that began Aug. 11 and ended with a 763-point gain. The Standard & Poor’s 500 rose 20.94, or 1.8 percent, to 1,164.97. The Nasdaq composite rose 46.31, or 1.9 percent, to 2,506.82.
Banks in Europe and the U.S. rallied. U.S. bank stocks rose sharply after Treasury Secretary Timothy Geithner told a congressional panel that U.S. financial firms had a “very modest” exposure to Europe’s debt problems.
The U.S. Labor Department said the number of new applications for unemployment benefits rose slightly last month to 401,000. While that is a signal that the job market continues to be weak, the increase was slightly less than what Wall Street economists had predicted, a sign that layoffs are easing. Unemployment benefits typically need to fall below 375,000 to signal job growth.
