Better news on U.S. job market sends stocks higher

New York • Stocks moved higher in morning trading Thursday as Wall Street went back to work after the Christmas holiday.

Traders were encouraged by an unexpectedly large drop in claims for unemployment benefits last week, the latest sign that the U.S. job market is improving.

The yield on the 10-year Treasury note, a benchmark for many kinds of loans, edged closer to 3 percent. It hasn't been that high since September.

KEEPING SCORE: The Dow Jones industrial average rose 56 points, or 0.3 percent, to 16,414 as of 11 a.m. Eastern. The Standard & Poor's 500 index rose five points, or 0.2 percent, to 1,838 and the Nasdaq composite was up eight points, or 0.2 percent, to 4,163.

JOB MARKET: The number of Americans who filed for unemployment benefits fell 42,000 last week to 338,000. The drop was far bigger than economists were expecting and an indication that fewer people were losing their jobs.

INTEREST RATES: The yield on the 10-year Treasury note rose to 2.99 percent from 2.98 percent Tuesday. Bond yields have been climbing since late November as economic reports have suggested that the U.S. recovery is gaining momentum. The increase accelerated last week after the Federal Reserve announced it was cutting back on its bond-buying program. The yield touched 3 percent in September. It hasn't been consistently above 3 percent since July 2011.

'SILVER LINING:' "There's a silver lining to see bond yields rise like this, because it's a sign that the economy is getting stronger," said John De Clue, chief investment officer of U.S. Bank Wealth Management.

DELIVERY BLUES: UPS fell 30 cents, or 0.3 percent, to $104.19. UPS said its distribution network was overwhelmed in the last few days before Christmas, which led to delivery delays for thousands of packages. Amazon.com, one of UPS's biggest customers, said it was refunding shipping charges and giving customers a $20 credit toward future purchases to compensate customers whose packages did not arrive in time for Christmas.

T-MOBILE IN PLAY?: T-Mobile rose 21 cents, or 1 percent, to $32.40 after The New York Times and other news outlets reported that the Sprint division of Japan's Softbank was looking to buy the wireless carrier.

BACK TO WORK: The New York Stock Exchange and the Nasdaq Stock Market will operate on a regular schedule after being closed Wednesday in observance of Christmas. Trading is expected to be light since many investors have already closed out their books for 2013.