* Dudley says Fed ready if further stimulus needed
* Initial jobless claims higher than expected
* Indexes up: Dow 0.92 pct, S&P 0.94 pct, Nasdaq 1.11 pct
By Rodrigo Campos
NEW YORK, April 12 U.S. stocks edged higher in
early trading on Thursday as concerns about rising yields in
some euro zone countries eased and on bets corporate America
will beat a lowered bar of earnings expectations.
The S&P 500 edged above its 50-day moving average in a sign
traders may see the recent pullback of nearly 5 percent as an
opportunity to catch up with the benchmark's performance. The
index is up almost 10 percent year-to-date.
New U.S. claims for unemployment benefits rose last week to
their highest level since January, but some economists cited the
Easter holidays for the spike in claims and expected
applications to continue to trend lower.
Benchmark bond yields in Italy and Spain ticked lower
following an Italian auction of three-year notes, while the euro
rose against the U.S. dollar, signaling easing near-term concern
about the euro zone's debt troubles.
"Auctions (in Europe) have not been disastrous and that was
good enough," said Art Hogan, managing director at Lazard
Capital Markets in New York. "Yields are not optimal but good
enough to not cause panic."
Basic materials shares led gains as the euro strengthened
against the U.S. dollar and commodity prices advanced. The S&P
materials sector added 1.5 percent. U.S. Steel and
Freeport-McMoRan Copper & Gold rose more than 4 percent.
Early into earnings season, results are beating Wall Street
expectations at a fast clip. Analysts say the expectations could
have been lowered too much and stocks can seem cheap after a
near 5 percent pullback on the S&P.
"What early reports we have already show a pretty good beat
rate," said Jim Paulsen, chief investment officer at Wells
Capital Management in Minneapolis. "I wonder if we're going to
beat the low hurdle of earnings."
The Dow Jones industrial average gained 118.30
points, or 0.92 percent, to 12,923.69. The S&P 500 Index
rose 12.90 points, or 0.94 percent, to 1,381.61. The Nasdaq
Composite added 33.52 points, or 1.11 percent, to
Market participants also cited expectations that China's
gross domestic product would surprise on the upside as a reason
for basic materials shares to rise.
"Basic materials and industrials could be up on bets the
Chinese GDP report tonight might be better than expected," Wells
Capital's Paulsen said.
Shares in Hong Kong and Shanghai rose overnight on optimism
about easier monetary policy in China and a better-than-expected
The U.S. Federal Reserve is running through data to
determine if last month's soft non-farm payrolls report was a
weather-related setback or a sign the recovery is losing
momentum, said New York Federal Reserve Bank president William
Dudley left the door open to additional stimulus measures if
the economic recovery gets off track. Previous rounds of
quantitative easing have been a boost for equities and other