Stocks rebound on drop in unemployment claims

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By Associated Press

NEW YORK (AP) — Stocks rose Thursday, a day after suffering their worst losses in seven months.

The government said first-time applications for unemployment benefits dropped last week to 385,000, a bigger fall than economists expected.

A separate report showed consumer prices edged higher in February. The Consumer Price Index rose 0.5 percent last month, slightly stronger than forecasts. Core prices, which exclude food and fuel costs, edged up 0.2 percent, the same as the previous month.

FedEx Corp. rose 5.5 percent. The world's second-largest delivery company said revenue rose 11 percent in the most recent quarter with higher prices, even though profits fell. FedEx said those higher prices may help it beat earnings expectations in the future.

The Federal Reserve said overall production at the nation's factories, mines and utilities dipped 0.1 percent last month. But the Fed also said production was actually higher in previous months than it first estimated.

Financial markets were gripped by fear over Japan's nuclear crisis on Wednesday. The Dow Jones industrial average had its biggest loss since August, nearly erasing its gains for the year.

The Dow rose 153, or 1.3 percent, to 11,767 in morning trading.

The Standard & Poor's 500 index rose 15, or 1.2 percent, at 1,271. With Thursday's gains, the Dow and S&P 500 are now up more than 1 percent for the year.

The Nasdaq rose 30, or 1.2 percent, at 2,647.

The dollar dropped to an all-time low against the Japanese yen late Wednesday, reaching 76.53 yen to the dollar. By Thursday morning, the yen had weakened and was trading at 78.60 yen to the dollar. When the yen loses strength, it takes more yen to buy one dollar.

A stronger yen would hurt Japan's exporters, potentially dealing another problem to an economy already wracked by an earthquake, tsunami and evolving nuclear crisis.

Finance ministers from the Group of Seven industrialized countries are due to hold a conference call later Thursday to discuss ways to calm financial markets and possibly curb the yen's rise.