Stocks: Dow up 1% after drop in jobless claims

Stocks are higher Thursday as a bigger-than-expected drop in jobless claims last week gave Wall Street hope that tomorrow's January employment report will come in strong enough to quell fears of an economic slowdown.

The Dow is on track for its best point gain of 2014.

In afternoon trading the Dow Jones industrial average is up 138 points -- 0.9% -- to 15,577. The Standard & Poor's 500 index is 0.9% higher at 1,767 and the Nasdaq composite 0.9% higher at 4,048. U.S. stocks struggled to gain traction and closed lower Wednesday as turbulence in emerging markets and the negative impact of bad winter weather on the economy gave investors pause.

Amid individual stocks, Twitter shares are down more than 20%. The micro-blogging service beat revenue projections when it released its corporate earnings report Wednesday, but Wall Street was not impressed with its weaker-than-expected user growth numbers.

European benchmarks put in a solid performance Thursday with regional bourses in the United Kingdom, Germany, France, Italy and Spain all up around 1.5% or more. In Asia, Japan's benchmark Nikkei 225 index declined 0.2% to 14,155.12.

PRODUCTIVITY: Grows at 3.2% rate

MORTGAGE RATES: 30-year falls to 4.23%

Shares of Coca-Cola and Green Mountain Coffee Roasters were also up sharply after Coke took a 10% stake in Green Mountain in a move centered around partnering on an in-home cold-beverage-maker system. Coke shares were up 1.3% to $38.08 and Green Mountain shares soared more than 27% to $102.93.

Wall Street is dealing with a lot of cross-currents early this year, including a drop of nearly 6% at one point for the S&P 500 that has raised fears that the broad market gauge was in danger of suffering its first 10% drop, or correction, since 2011. While the index hasn't fallen that much, more than half of the stocks in the index are down more than 10% from their highs, a statistic that shows just how broad the downturn has been.

The number of Americans fili! ng for first-time unemployment benefits fell by 20,000 to 331,000 in the past week, which was better than the 335,000 first-time claims Wall Street was expecting.

TRADE DEFICIT: Widens to $38.7B

JOBLESS CLAIMS: Decline signals few layoffs

WEDNESDAY: Markets finish session slightly lower

The upbeat outlook for jobs has taken a little bit of the fear factor out of the market. A closely watched Wall Street "fear gauge," known as the VIX, fell 10% Thursday. Similarly, the safe-haven rush to U.S. government bonds cooled. The price of the 10-year Treasury fell, and the yield, which moves in the other direction, rose to 2.7%, up from 2.67% Wednesday and well above Monday's three-month low of 2.58%

Investors were also digesting meetings by the European Central Bank and Bank of England Thursday, as well as a U.S. report on non-farm payrolls for January on Friday. Both the ECB and the BOE kept interest rates on hold and also made no changes to their bond-buying programs.

Benchmark U.S. oil for March delivery rose 14 cents to $97.52 in electronic trading on the New York Mercantile Exchange. The contract rose 19 cents to close at $97.38 Wednesday.

FIRST TAKE: Sometimes financials aren't enough