Late Rally Sends U.S. Markets Higher

September 11, 2008 5:33 p.m. EST

New York, NY (AHN) - Markets opened Thursday lower as higher than expected weekly unemployment claims and worries over Lehman Brothers' solvency set a negative tone. However, a late rally in financials helped propel the major indices off lows into positive territory.

The Labor Department reported for the week ended Sept 6, total unemployment claims of 445,000. Economists were expecting 440,000. However, the number of claims did drop 6,000 from the prior week.

The Dow Jones Industrial average added 164 points or 1.46 percent. The late afternoon surge helped nearly all the components reach positive ground as 28 of 30 Dow stocks finished with a gain. For the second consecutive session General Motors was the Dow leader, up 11.6 percent. The recent slide in oil prices has help lift the automakers of late.

The S&P 500 rose 17 points or 1.38 percent. Nine of 10 major economic sectors finished higher. The oil & gas refining stocks were strongest, up 8.3 percent due to improved crack spreads, which is the difference between the price paid for oil and the price that can be charged for the fuels it makes.

The financial sector continues its roller-coaster week, trading 4 percent lower early on as worries over Lehman's restructuring plan leaned on Wall Street. A furious rally in the last hour of trading sent the financials higher as the sector managed a 1.7 percent gain. Outside of Lehman, all of the major financial names participated in the rally.

The tech stocks finished with gains as the Nasdaq Composite rose 29 points or 1.32 percent. Big-cap tech names led the way with the Nasdaq 100 adding 2 percent on Thursday. Shares of Research in Motion were strong, adding 4.5 percent on the session.

Crude oil sank as low as $100.20 before settling at $100.99, down $1.59 a barrel. Even with the threats of Hurricane Ike, oil has slid in recent sessions.

Friday's session will see the release of the August Producer Price Index (PPI) and August Retail Sales.