Dow surges after EU vows support for Greece

NEW YORK (AP) — Relief about Europe’s pledge to support Greece sent the US stock market charging higher Thursday.

The Dow Jones industrial average jumped 106 points as confidence grew that aid to Greece would extinguish one of the several threats that investors see to an economic recovery.

According to preliminary calculations, the Dow rose 105.81, or 1.1 percent, to 10,144.19. The S&P 500 index rose 10.34, or one percent, to 1,078.47. The Nasdaq composite index rose 29.54, or 1.4 percent, to 2,177.41.

The market’s advance was broad-based, but energy and materials stocks logged some of the biggest gains after oil prices rose for a fourth day and a tame report on inflation in China suggested the country wouldn’t have to move more aggressively to slow its economy.

China’s rapid economic expansion has been driving up demand for natural resources, and the benign signal on inflation there sent shares of materials companies higher. Oil and gas company Pioneer Natural Resources Co. rose 4.3 percent, while metals producer Freeport-McMoRan Copper & Gold Inc. climbed 4.4 percent.

Encouraging news about jobs in the US also supported the market. The Labor Department said first-time claims for jobless benefits fell more than expected last week. Economists say a lasting economic recovery can’t take hold without big gains in jobs.

Analysts warned that a patch to Greece’s finances won’t necessarily be enough to restart a 10-month rally in stocks that stalled last month. Questions are still looming over the market about how the US economy will fare after the government starts to unwind the supports it used to help the financial system over the past two years.

Fed chairman Ben Bernanke on Wednesday outlined plans to begin to wean the economy from government aid. The market initially took the news poorly but then recovered later in the day as many analysts viewed the plans as a logical next step for policymakers.