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Wall Street claws back losses, shakes off grim labor news

The Dow Jones Industrial Average reversed opening losses and rose 10.20 points (0.12 percent) to 8,601.89 at 1602 GMT, following two days of strong rallies.

The Nasdaq composite added 5.80 points (0.39 percent) to 1,498.18 and the broad-market Standard & Poor’s 500 edged up 2.48 points (0.28 percent) to 873.22.

As the market opened, investors learned that telecommunications giant AT&T announced was cutting 12,000 jobs and slashing capital spending due to an economic downturn.

Job cuts were also announced by media giant Viacom and chemical maker DuPont.

A government report showed a drop in the number of new unemployment claims in the past week, but the level remained high at 509,000.

“The market shook off a lot of discouraging headlines yesterday to end higher,” said Patrick O’Hare at Briefing.com.

“Whether it can do so again today remains to be seen, but it will have its work cut out for it as the headlines again leave a lot to be desired.”

Kent Engelke, chief strategist at Capitol Securities Management, said the economic outlook is grim but not as dire as the stock market is expecting.

“This recovery will be anemic,” he said.

“While some might view this outlook as dire, it beats the alternative that many are discussing—a complete implosion of the economy, an event I can’t foresee happening given the government’s actions.”

Among key stocks, AT&T dipped 0.38 percent to 28.97 dollars after announcing its restructuring plans.

But DuPont rose 0.72 percent to 23.78 dollars as the chemical giant announced cuts of at least 2,500 jobs in North America and Europe due to realign in the face of weak demand.

Viacom, the media-entertainment titan, dipped 1.5 percent to 15.77 dollars on announcing cuts of seven percent of its workforce, or 850 positions.

Wal-Mart paced the gainers, rising 2.48 percent to 55.73 dollars as the retail sector leader announced better-than-expected monthly sales report.

Bonds rose as yields fell to fresh record lows. The yield on the 10-year US Treasury dropped to 2.631 percent from 2.676 percent Wednesday and that on the 30-year bond eased to 3.130 percent against 3.184 percent. Bond yields and prices move in opposite directions.