* Claims for jobless benefit fall
* Chicago PMI beats forecasts
* S&P gains 9 pct in September, almost 12 pct in quarter
* Indexes up: Dow 0.7 pct, S&P 0.7 pct, Nasdaq 0.5 pct
* For up-to-the-minute market news see []
(Updates to open)
By Edward Krudy
NEW YORK, Sept 30 (Reuters) - U.S. stocks rose on Thursday
after a sharp fall in weekly claims for jobless benefits and
early signs of strength in September business activity lifted
confidence in the economy.
The S&P 500 <.SPX> has gained more than 9 percent so far
this month, helped by signs of stabilization in the economy and
hopes the Federal Reserve will take extra steps to spur the
recovery. Thursday's convergence of stronger data provided
another boost for equities.
The biggest gains came in sectors that tend to do better in
a stronger economy, such industrials, consumer discretionary,
and energy. Boeing Co <BA.N> led the Dow industrials higher,
gaining 1.9 percent to $67.24.
"We could be seeing the last vestiges of the idea that too
much bad news was built into the market," said John Brady,
senior vice president at MF Global in Chicago. "We could go
from being overly pessimistic to overly optimistic."
New U.S. claims for unemployment benefits fell by 16,000
last week to 453,000, the Labor Department said, a steeper fall
than had been anticipated and a sign the labor market may be
strengthening modestly.
That was backed up by stronger readings for regional
business activity indexes in New York City and the U.S.
Midwest, seen as early indicators before national surveys on
Friday and later next week.
The U.S. Commerce Dept also revised higher its final
estimate of economic growth in the second quarter.
The Dow Jones industrial average <> rose 70.99 points,
or 0.66 percent, at 10,906.27. The Standard & Poor's 500 Index
added 8.26 points, or 0.72 percent, at 1,152.99. The Nasdaq
Composite Index <> gained 12.74 points, or 0.54 percent,
at 2,389.30.
Investors' attention will now turn to Federal Reserve
Chairman Ben Bernanke, who will testify before a Senate Banking
Committee hearing on implementing the recently passed financial
regulation act.
Indexes could be lifted further as fund managers chase high
performing stocks and sell losing shares to dress up portfolios
by the quarter's end. The S&P 500 is headed for a quarterly
gain of 11.75 percent as the three-month period ends on
Thursday.
American International Group Inc <AIG.N> shares jumped 6.1
percent to $39.70 after the company and the U.S. government
agreed on a plan that would see the insurer repay taxpayers
fully for bailing it out at the height of the financial
crisis.
Prudential Financial Inc <PRU.N> fell 27 percent to $55.01
after the company agreed to buy two Japanese life insurance
units from AIG for $4.2 billion. []
Mattel Inc <MAT.O> shares fell 0.2 percent to $22.51 as the
U.S. Consumer Product Safety Commission said the company's
Fisher-Price unit would recall about 10 million toys because of
injury hazards to children.
(Additional reporting by Ryan Vlastelica and Rodrigo Campos;
Editing by Padraic Cassidy)
