U.S. stocks edge up after jobless claims drop
New York • Stocks moved slightly higher in morning trading Thursday after the government reported that the number of people applying for unemployment benefits sank last week, a sign that employers are laying off fewer people.
KEEPING SCORE: The Standard & Poor's 500 index rose four points, or 0.2 percent, to 1,914 as of 11:03 a.m., three points above its record close of 1,911 reached on Tuesday. The Dow Jones industrial average rose 18 points, or 0.1 percent, to 16,651 and the Nasdaq composite rose 12 points, or 0.3 percent, to 4,237.
TASTES LIKE CHICKEN: Hillshire Brands shot up $6.97, or 16 percent, to $51.76. Chicken company Tyson Foods made a $6.2 billion offer for the deli meats and hotdog maker, two days after Pilgrim's Pride bid $5.58 billion for the company. Hillshire is already trading above Tyson's $50-per-share offer. Tyson also rose on the news. The stock gained $2.59, or 6.4 percent, to $43.34.
HUNGRY HUNGRY INVESTORS: Other food companies also rose following the Hillshire Brands news as traders anticipated more deals and possibly more bidding wars. Jam and jelly maker J.M. Smucker rose $1.57, or 2 percent, to $102.20. Hormel Foods, which makes Spam, rose 72 cents, or 1.5 percent, to $48.43
WRONG WAY: The Commerce Department said Thursday that the U.S. economy shrank at an annual rate of 1 percent in the first three months of the year, worse than the government's initial estimate a month ago. The contraction was partly due to the severe weather in January and February, economists said. Investors expect the economy should rebound in the April-June period.
JOBS WATCH: The number of Americans applying for unemployment benefits dropped last week to 300,000, according to the Labor Department. The less-volatile four-week average fell to 311,500, the lowest since August, 2007.
BONDS: The yield on the 10-year Treasury note traded at 2.43 percent, down slightly from Wednesday. Bond yields have been trading at lows not seen in a year, as foreign buyers have jumped into U.S. Treasurys.