Stocks rise on hopes Greek vote will be scuttled
NEW YORK (AP) - Stocks edged up in early trading Thursday as hopes grow that a plan to tackle the European debt crisis will survive. The Dow Jones industrial average was up 70 points after the first hour of trading.
The European Central Bank also surprised markets early Thursday by cutting its benchmark interest rate to 1.25 percent. The bank had increased its key rate twice this year, but that was before Mario Draghi took over as head of the bank this week. The announcement sent European stock indexes modestly higher.
Greece's prime minister shocked investors with a call this week to put a European rescue package to a vote. The prime minister was in an emergency meeting Thursday after members of his government called for him to step down. The hope is that a new government would approve the rescue package without a referendum.
The Dow was up 0.6 percent at 11,904 as of 10:25 a.m. Eastern. The S&P 500 index rose 4 points, or 0.4 percent, to 1,242. The Nasdaq rose 5, or 0.2 percent, to 2,645.
Companies reporting quarterly earnings were among those making the biggest gains.
Estee Lauder Cos. jumped 13 percent, the top stock in the S&P 500. The company's quarterly earnings soared 46 percent on strong global sales, which beat analysts' expectations. The company also raised its annual earnings outlook.
Alpha Natural Resources rose 10 percent. The coal producer's profit more than doubled, helped by its acquisition of rival Massey Energy Co. and higher prices for coal used to make steel. The results topped estimates.
Qualcomm Inc. gained 7 percent, after the chip-maker for mobile phones said rising smartphone demand helped it post results that were stronger than analysts were expecting.
Kraft Foods Inc. rose 3 percent. The food company, whose brands include Nabisco and Maxwell House, reported a 22 percent jump in income thanks to higher prices on some of its products. Kraft also raised its full-year profit forecast.
Kellogg Co. dropped 7.8 percent after its quarterly earnings fell even further than analysts had expected. The cereal and snack maker was hit by higher costs for ingredients.
U.S. economic reports were mixed. The number of people who applied for unemployment benefits dipped slightly last week, a sign that layoffs are easing. Also, companies made more orders to U.S. factories in September. A category that tracks business investment rose the most in six months. On the down side, an index of service sector business fell slightly in October.
Stocks made broad gains Wednesday as European leaders scrambled to save their plan to prevent the European financial crisis from getting worse.
Better corporate earnings and an increase in hiring by private companies also drove markets higher. The Dow is still down 2.8 percent this week after steep drops Monday and Tuesday.