Stocks score big a 2nd day

Stocks scored their second straight big advance Thursday after economic figures suggested the job market was holding up and lawmakers agreed on a stimulus package.

The Dow Jones industrials climbed more than 100 points, bringing their two-day gain to more than 400 points.

Although stocks fluctuated throughout the session, trading was decidedly more calm than on Wednesday, when stock prices executed a stunning turnaround that transformed a sharp sell-off into big gains.

The market wobbled during Thursday’s session after Fitch Ratings downgraded bond insurance company Security Capital Assurance, whose shares plunged $1.16, or 31%, to $2.63. Bond insurers have been hurt in the fallout from the mortgage and credit crises.

Those seeking good news found some in a Labor Department report that said the number of people signing up for unemployment benefits had fallen for a fourth straight week. Applications for benefits fell 1,000 to 301,000 last week, the lowest level in four months.

Investors also appeared pleased with a rapidly reached agreement between congressional leaders and the White House on an economic stimulus package. The agreement calls for most tax filers to be given refunds of $600 to $1,200, and more if they have children.

The Dow Jones industrial average rose 108.44 points, or 0.9%, to 12,378.61, following a nearly 300-point surge Wednesday.

Broader stock indicators also rose. The Standard & Poor’s 500 index gained 13.47 points, or 1%, to 1,352.07, and the Nasdaq composite index advanced 44.51 points, or 1.9%, to 2,360.92.

The Russell 2,000 index of smaller companies fell 0.71 of a point, or 0.1%, to 692.72.

Advancing issues outnumbered decliners 4 to 3 on the New York Stock Exchange.

Stephen Carl, principal and head of equity trading at Williams Capital Group, said Thursday’s overall trading reflected a continuation of the bounce that began Tuesday, when the Federal Reserve lowered its key interest rate by 0.75 of a percentage point. But he said uncertainty remained.

“We still have a long way to go in getting the economy on track,” Carl said. “Whether we dip into a recession or not, a lot of things need to be fleshed out in the markets.”

Most Asian, European and Latin American stock markets posted strong gains after Wall Street’s sharp turnaround on Wednesday.

Japan’s Nikkei 225 index rose 2.1%, the Australian market gained 3.1%, British stocks surged 4.8%, the German market jumped 5.9% and the Brazilian market rocketed nearly 6%.

Yields on U.S. government bonds rose along with stocks. The yield on the benchmark 10-year Treasury note climbed to 3.71% from 3.55% late Wednesday. The dollar was mixed against other major currencies.

Gold surged to a record high. Near-term gold futures in New York jumped $23 to $905.50 an ounce. The price is up 8.5% year to date.

Oil prices rose after the stimulus-plan agreement was announced on the theory that boosting the economy would increase demand for energy. Crude futures rose $2.42 to settle at $89.41 a barrel on the New York Mercantile Exchange. The price hit a three-month low Wednesday.

Battered financial stocks were mostly higher for a third day. Citigroup rallied 97 cents to $27.33, Comerica gained $1.71 to $41.23, FirstFed Financial jumped $3.96 to $39 and Capital One surged $3.55 to $47.75.

But Merrill Lynch slipped 60 cents to $57.45.

Pasadena-based IndyMac Bancorp surged $1.07, or 25%, to $5.43 after its chief executive said the No. 2 independent U.S. mortgage company had a “good shot” at profitability this year. CEO Michael Perry said the company was “definitely a survivor” and wouldn’t meet the same fate as Countrywide Financial because IndyMac’s parent company has little debt.

In other market highlights:

* Energy stocks rebounded with oil prices. Exxon Mobil rose $2.55 to $86, Chevron jumped $2.22 to $83.67 and Valero Energy was up $2.28 to $55.33.

* Microsoft rose 4% in after-market trading from its Thursday close of $33.25 after the release of its fiscal second-quarter earnings. The company posted a 79% jump in profit, surpassing expectations, thanks to strong sales of Windows-based personal computers.

* Apple continued to slide after its earnings forecast late Tuesday disappointed investors. The stock fell $3.47 to $135.60 after plunging $16.57 on Wednesday. The shares are down 32% year to date.

* Agoura Hills-based THQ plummeted $5.60, or 22%, to $19.50 after the video game software firm reduced its sales forecast for the current quarter and said it would lose money in the period.

* Wireless technology giant Qualcomm soared $3.78 to $40.41 after the company on Wednesday raised its 2008 sales forecast.

* Xerox jumped $1.08, or 8.2%, to $14.33. The company’s fourth-quarter profit rose 79% on strong sales of new devices that print, copy, fax and scan.