NEW YORK: Wall Street stocks jumped early Thursday following better employment data and relief at the diminished risk of a near-term US debt default as Congress potentially nears a deal.
Stocks extended the positive momentum from Wednesday's session that came after congressional Republicans signaled they would allow a short-term lifting of the debt ceiling, removing the risk of a default in the coming days.
The move gives the market "a little breathing room," said Briefing.com analyst Patrick O'Hare.
"Yet it remains saddled with an understanding that this is just a kick-the-can down the road approach that could still kick it in the can sometime in December if neither side blinks at that time."
About 25 minutes into trading, the Dow Jones Industrial Average was up 1.2 percent at 34,828.88.
US stocks open higher, rebounding somewhat
The broad-based S&P 500 gained 1.2 percent to 4,414.23, while the tech-rich Nasdaq Composite Index advanced 1.3 percent to 14,687.79.
The Labor Department reported 326,000 new unemployment claims, seasonally adjusted, were filed last week, 38,000 less than the previous week's upwardly revised level and fewer than analysts had expected.
The data come ahead of Friday's much-anticipated September jobs report that will be scrutinized for its implications on a Federal Reserve plan to soon taper stimulus.
Many analysts think the Fed will announce the shift in the fourth quarter unless the jobs report is a major disappointment.
Based on comments from Federal Reserve Chair Jay Powell, the jobs data must clear a "low bar" to keep the Fed plan on course, said Karl Haeling of LBBW.
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