Trade-deficit news boosts markets

NEW YORK - A jump in exports lifted stocks yesterday, offsetting concerns about an increase in unemployment claims.

The market came away with moderate gains for the day after the Commerce Department said rising exports helped narrow the nation's trade gap to $32.9 billion in October. Economists had expected an increase.

A weaker dollar is raising demand for U.S. goods by making them less expensive for overseas buyers. That trend helped lift U.S. exports 2.5 percent, the sixth straight monthly increase.

James Cox, managing partner at Harris Financial Group, of Colonial Heights, Va., said stepped-up demand for U.S. goods would boost the nation's economy.

"Any time you have a small trade balance, that will really contribute greatly to GDP," or gross domestic product, Cox said.

The trade figures helped offset mixed jobs numbers. The Labor Department said the number of laid-off workers seeking jobless benefits rose more than expected last week to 474,000 after falling for five straight weeks. That was higher than analysts were expecting, but a less-volatile four-week average fell to the lowest level since September 2008.

The gains in stocks came as the dollar stabilized. For months, stocks and the dollar have moved in the opposite direction. Record-low U.S. interest rates have made the dollar less attractive to investors who are more confident in an economic recovery and seeking assets like stocks and commodities that can offer better returns than cash.

In recent weeks, signs of improvement in the economy have brought expectations that the Federal Reserve might raise interest rates sooner than expected. That would strengthen the dollar and could shake up the stock market as investors rejigger their portfolios.

Anthony Chan, chief economist at JPMorgan Private Wealth Management in New York, said the increase in weekly unemployment claims eroded some of the enthusiasm over rising exports.

"That is what's preventing the market from really galloping higher," Chan said.

The Dow Jones industrial average rose 68.78, or 0.67 percent, to 10,405.83.

The Standard & Poor's 500 index rose 6.40, or 0.58 percent, to 1,102.35, while the Nasdaq composite index rose 7.13, or 0.33 percent, to 2,190.86.

The S&P 500 index is up 22 percent for the year after a nine-month rally, but it has not gained much ground in the last month.

The Russell 2000 index of smaller companies fell 2.65, or 0.44 percent, to 595.38.

Britain's FTSE 100 rose 0.8 percent, while Germany's DAX index and France's CAC-40 each rose 1.1 percent. Japan's Nikkei stock average fell 1.4 percent.