In this Wednesday, Nov. 7, 2012, photo, Luke Scanlon, left, of MND Partners Inc. works on the floor of the New York Stock Exchange in New York. Financial markets settled down Thursday, Nov. 8, 2012, after the turmoil of the previous day when concerns over the U.S. fiscal situation combined with renewed worries over the European economy to hammer stocks.
NEW YORK — Stocks inched higher on Wall Street early Thursday, steadying a day after the Dow Jones industrial average logged its biggest one-day drop of the year. Investors were encouraged by two reports on the U.S. economy.
The Dow Jones industrial average gained 25 points to 12,962 in the opening minutes of trading. The Standard and Poor's 500 index rose four points to 1,398 and the Nasdaq composite rose nine to 2,946.
The Labor Department reported that the number of people seeking unemployment benefits fell last week by 8,000 to a seasonally adjusted 355,000, a possible sign of a healing job market. Officials cautioned that the figures were distorted by Superstorm Sandy.
A separate report showed that the U.S. trade deficit narrowed to its lowest level in almost two years as exports rose to a record high.
There was also encouraging news from Europe, where leaders shocked markets a day earlier with a dire forecast for economic growth next year.
European Central Bank head Mario Draghi said financial market confidence "has visibly improved" as the 17-country group that uses the euro struggles with its debt crisis. But he said the outlook for the economy remains "weak." Draghi spoke after the bank's governing council left its key interest rate unchanged at 0.75 percent.
The European Commission, the executive arm of the EU, on Wednesday slashed cut its outlook for growth for this year and 2013. The report helped set off a sharp decline in stocks in the U.S and Europe.
The Dow Jones industrial average plunged 313 points Wednesday, its fifth worst one-day drop following a U.S. presidential election. The biggest, in 2008, came in the midst of the financial crisis on the day after President Barack Obama won his first term.
The sell-off came the day after Obama was elected for a second four-year term as investors turned their focus back to Europe's problems and a package of tax increases and government spending cuts in the U.S. that could stall the economic recovery unless Congress acts by Jan. 1.
Among stocks making big moves:
— Energy drink maker Monster Beverage sank $2.41 to $42.56 after the company said its revenue growth slowed in the third quarter.
— Dean Foods rose 88 cents to $16.96 after the company reported a third quarter profit of $36 million for the third quarter, compared with a $1.5 billion loss in the same period a year earlier.
About three stocks rose for every two that declined on the New York Stock Exchange