Stocks edge higher as unemployment claims decline

SAMANTHA BOMKAMP AP Business Writer Published:

NEW YORK (AP) -- U.S. stocks edged higher in early trading Thursday following strong bank earnings and a decline in applications for unemployment benefits.

The Standard & Poor's 500 is up a point to 1,309 shortly after 10 a.m. Eastern. The Nasdaq composite is up 12 points to 2,781. The Dow Jones industrial average inched up 10 points to 12,589.

The government reported early Thursday that the number of people seeking unemployment benefits plunged last week to the lowest level in more than three years. France and Spain also held successful bond auctions, easing worries about that region's two-year-old debt crisis.

Bank of America and Morgan Stanley rose after reporting results that were better than analysts had expected. BofA returned to profit in the fourth quarter while Morgan Stanley's loss was less than forecast. Both stocks rose more than 5 percent.

Trading was halted in shares of photography icon Eastman Kodak after the company filed for Chapter 11 bankruptcy protection. The ailing company failed to find a buyer for its trove of 1,100 digital imaging patents.

Among other stocks making large moves:

-- eBay Inc. rose more than 2 percent after the online auction company beat analysts' earnings forecasts and provided a healthy outlook for the year.

-- Southwest Airlines Co. rose more than 2 percent after it said its fourth-quarter net income and revenue jumped. Southwest said it expects strong revenue in the first quarter too, based on passenger-booking trends.

-- Johnson Controls Inc., an auto parts and building equipment maker, fell 8 percent. The Milwaukee-based company reported earnings and revenue that fell short of Wall Street's forecasts. It also cut its estimate for its fiscal year earnings, blaming weaker auto production in Europe, a lower euro and poor demand for batteries.

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