Stocks rise after 4-day losing streak

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NEW YORK (CNNMoney) -- U.S. stocks advanced Thursday, with the S&P 500 and Nasdaq snapping a 4-day losing streak, as investors welcomed an unexpected drop in the number of people filing first-time unemployment claims.

The number of jobless claims fell 30,000 to 339,000 last week, hitting the lowest level since February 2008.

While the significant drop was caused by an anomaly -- one state posted a large decline in claims, which is not typical during the last week in September -- it still helped drive stocks higher following weakness in the early part of the week.

The Dow Jones industrial average added 0.4%, while the S&P 500 rose 0.6% and the Nasdaq gained 0.7%.

Financial stocks were big gainers, as Bank of America (BAC, Fortune 500) and JPMorgan Chase (JPM, Fortune 500) drove the Dow higher.

Other economic data was also encouraging. The U.S. Census Bureau said the trade deficit fell slightly to $44.2 billion from July to August. The Labor Department also reported import prices rose 1.1% in September while export prices rose 0.8%.

Also adding fuel to the morning's positive trading was a report that Japan's Softbank is in talks to acquire telecom operator Sprint Nextel, said Dave Rovelli, managing director of U.S. equity trading at Canaccord Adams.

Sprint (S, Fortune 500) shares surged 13% following a Wall Street Journal report that Softbank (SFTBF) is nearing a deal to buy a controlling stake in the third largest U.S. carrier for about $12.8 billion. As of August, Softbank's mobile arm has more than 30 million subscribers. Sprint networking partner Clearwire (CLWR) soared 35% on reports that Softbank may want to buy it as well.

Earlier this week, there had been speculation that Sprint may make a play for rival MetroPCs (PCS, Fortune 500), which last week agreed to merge with T-Mobile USA operator Deutsche Telekom.

Related: M&A drought not letting up

Meanwhile in Europe, credit rating agency S&P downgraded Spain late Wednesday, and warned that the latest plan to recapitalize Spanish banks "still lacks predictability."

Joe Heider, managing principal of Rehmann Financial, said many investors were seeing the downgrade as a positive catalyst that could force Spain to finally seek a bailout.

European stocks started off lower, but rebounded as the morning progressed. Britain's FTSE 100 added 1%, the DAX in Germany rose 1.2% and France's CAC 40 advanced 1.2%.

Meanwhile in Asia, South Korea's central bank lowered interest rates for the second time this year. Markets ended the day mixed. The Shanghai Composite slid 0.8% and Japan's Nikkei shed 0.6%, while the Hang Seng in Hong Kong ticked up 0.4%.

Fear & Greed Index

Companies: Third-quarter earnings season is underway, but only a handful of companies reported Thursday, including hardware supply store Fastenal and Safeway. Fastenal (FAST) shares jumped as the company met earnings expectations, while Safeway (SWY, Fortune 500) shares declined after the company posted weak same-store sales.

Realogy, the parent of real estate brokers Century 21, ERA and Coldwell Banker, began trading on the New York Stock Exchange under the ticker RLGY after the company priced its IPO at the top end of its estimated range. Shares of Realogy (RLGY) rose 27% from their offering price.

Shares of Shutterstock (SSTK) jumped 30% in their market debut. The online stock photography company also priced its shares above the expected range in its IPO.

Currencies and commodities: The dollar fell versus the euro and British pound, but it gained against the Japanese yen.

Oil for November delivery added $1.30 to $92.55 a barrel.

Gold futures for December delivery rose $7.90 to $1,773 an ounce.

Bonds: The price on the benchmark 10-year U.S. Treasury edged lower, pushing the yield up to 1.72% from 1.69% late Wednesday.

First Published: October 11, 2012: 9:40 AM ET

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