Stocks surge on jobs, Cisco

NEW YORK - A bright forecast from Cisco Systems Inc. and upbeat economic news sent stocks soaring yesterday and propelled the Dow Jones industrials back above 10,000. The rally, coming a day before the government's October employment report, showed that investors are regaining optimism about an economic recovery.

The Dow bolted up 203.82 points, or 2.08 percent, while the Nasdaq composite index, led by Cisco's outlook, rose 2.42 percent. The latest surge was powered by a wave of good news:

Cisco boosted hopes for the technology industry after the maker of computer-networking gear forecast revenue growth for the first time in a year. The forecasts of chief executive officer John Chambers carry big weight on Wall Street, and his announcement that Cisco would begin hiring workers injected confidence.

The government 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.

Worker productivity jumped the most in six years, rising to an annual rate of 9.5 percent in the July-to-September quarter.

Retailers had higher sales for the second straight month in October after more than a year of sliding.

The reports gave investors a shot of optimism about the government's monthly report on employment today, which will steer trading because of the ties between joblessness and consumer spending. Analysts say spending must increase for the economy to have a sustained recovery.

The Dow rose 203.82, or 2.08 percent, to 10,005.96. All 30 stocks in the index rose.

The broader Standard & Poor's 500 index rose 20.13, or 1.92 percent, to 1,066.63.

The Nasdaq rose 49.80, or 2.42 percent, to 2,105.32.

The Russell 2000 index of smaller companies rose 18.03, or 3.20 percent, to 581.15.

Cisco's prediction late Wednesday that it expected revenue to grow for the quarter ending in January renewed optimism about tech companies, which have been leaders in the market's eight-month run. Shares of Cisco rose 64 cents, or 2.75 percent, to $23.93.

And among banking companies, shares of Citigroup Inc. rose 9 cents to close at $4.06. The company said yesterday that it filed plans for an initial public offering of its Primerica Financial Services Inc. life insurance unit and will sell off the rest of the division after it goes public.