NEW YORK — A drop in unemployment claims and an upbeat forecast from Cisco Systems Inc. gave investors new reason to be optimistic about the economy and sent stocks to big gains.
The Dow Jones industrial average jumped 200 points Thursday, while the Nasdaq composite index gained more than 2 percent after Cisco, the maker of computer-networking gear, predicted its revenue would grow.
The Labor Department said the number of newly laid-off workers seeking unemployment benefits fell to 512,000 last week, the lowest level since January and fewer than economists had forecast. Initial claims are considered a gauge of the pace of layoffs.
The report fanned optimism that the government’s monthly report on employment Friday might prove better than expected. Analysts project that the unemployment rate rose to 9.9 percent in October.
The biggest jump in productivity in six years drove hopes that lower costs will boost corporate profits. The report also illustrated, though, that many employers remain reluctant to hire.
The government said the amount of output per hour worked rose 9.5 percent in the July-September quarter.
Meanwhile, retailers posted sales gains for the second straight month in October after more than a year of sliding sales.
The retail industry posted a 2.1 percent sales gain for October, according to an International Council of Shopping Centers-Goldman Sachs tally. Investors are looking for any sign that consumers are willing to spend more as the holiday shopping season approaches.
“The news coming in has been for the most part better than expected,” said Mike Boyle, senior vice president and portfolio manager at Advisors Asset Management.
The Dow average rose 203.82 to close at 10,005.96. The broader Standard & Poor’s 500 index rose 20.13 to 1,066.63, while the Nasdaq rose 49.80 to 2,105.32.
The Russell 2000 index of smaller companies rose 18.03 to 581.15.
Bond prices were mixed. The benchmark 10-year Treasury note fell, pushing its yield up to 3.54 percent from 3.53 percent late Wednesday.
Mixed economic data in recent weeks have made it difficult for investors to get a sense of where the economy is headed, leading to choppy trading.
The Federal Reserve pointed to hopeful signs about the economy Wednesday but also said it would keep interest rates low for “an extended period” to help stimulate growth.
The dollar fell against other major currencies. Gold prices rose.
Light, sweet crude fell 78 cents to settle at $79.62 per barrel on the New York Mercantile Exchange.
Overseas, Japan’s Nikkei stock average fell 1.3 percent.
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