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US stocks end higher; Dow has its best day of 2014

NEW YORK (AP) — After a rocky start to the week, U.S. stocks roared back on Thursday, giving major stock indexes their biggest gain of the year.

The Dow Jones industrial average and the S&P 500 index each closed up 1.2 per cent, their largest single-day increase since Dec. 18.

The rally helped the market rebound a day after a modest loss and continued a gradual comeback since a plunge of more than 2 per cent on Monday.

Thursday's surge began overseas, where the European Central Bank decided not to cut interest rates. The move propelled major European stock indexes sharply higher.

Then the markets got a dose of good news on the U.S. job market. The Labor Department reported that fewer people applied for unemployment benefits last week.

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Fears of slowdown sharpen focus on US jobs report

WASHINGTON (AP) — Fears of an economic slowdown are heightening anticipation of what Friday's U.S. jobs report for January might reveal.

Stock markets have sunk after signs of weaker growth in the United States, Europe and China. Turmoil in developing countries has further spooked investors. The upheaval has renewed doubts about the Federal Reserve's next steps.

Evidence of healthy U.S. job growth would help soothe those jitters. It would suggest that the world's biggest economy is still expanding solidly enough to support global growth.

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Eurozone rates unchanged despite deflation fear

FRANKFURT, Germany (AP) — The European Central Bank is sizing up the problems facing the 18-country eurozone before it decides whether to cut interest rates to support the anemic recovery, its president said Thursday.

Weak growth and an unexpected drop in inflation have raised concerns that the eurozone might slide into deflation, a sustained drop in prices that can cripple the economy. The eurozone is among the world's biggest economic blocs, and a slide into deflation would crimp global growth.

But the ECB's governing council left its interest rate benchmark unchanged at a record low of 0.25 per cent at its meeting Thursday. Some analysts had thought it might cut the rate to 0.1 per cent.

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SAC Capital ex-trader convicted of insider trading

NEW YORK (AP) — A former SAC Capital Advisors portfolio manager was convicted Thursday of helping his company earn more than a quarter billion dollars illegally through trades based on secrets about the testing of a potential breakthrough Alzheimer's drug.

The verdict capped a three-week trial that featured testimony from two prominent doctors who confessed to spilling secrets to Mathew Martoma during lucrative consultations. When prosecutors announced the case in November 2012, they said it may be the most lucrative insider trading scheme of all time.

Martoma watched the jury without expression as the jury forewoman announced he was guilty of two counts of securities fraud and conspiracy to commit securities fraud. Tears streamed down the face of his wife, Rosemary, whose hands were folded on her yellow dress. No sentencing date was set.

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US cos. push voluntary labels on modified foods

WASHINGTON (AP) — America's large food companies are trying to head off efforts to enact mandatory labeling of genetically modified ingredients by proposing new voluntary labels nationwide.

The food industry and farm groups are pushing Congress to pass legislation that would require the Food and Drug Administration to create guidelines for the new labels, which food manufacturers could use.

A federal standard for voluntary labels would get food manufacturers off the hook if any U.S. states pass laws requiring mandatory labeling. Recent ballot initiatives in California and Washington failed, but several state legislatures are considering labeling requirements and opponents of engineered ingredients are aggressively pushing new laws in several states.

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New rules would ensure safety of infant formula

WASHINGTON (AP) — The Food and Drug Administration is laying out new requirements to ensure the safety of infant formula.

The rules announced Thursday are designed to make sure that formula manufacturers test their products for salmonella and other pathogens before they are distributed. They would also require formula companies to include specific nutrients, including proteins, fats and vitamins.

Most formula manufacturers follow these practices already, but the rules will ensure that new formulas on the market also comply with the requirements. It would also allow the FDA to better enforce those requirements.

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Applications for US jobless aid fall 20K to 331K

WASHINGTON (AP) — The number of people applying for U.S. unemployment benefits declined 20,000 last week to 331,000, suggesting that Americans are facing fewer layoffs and better job prospects.

The Labor Department said the four-week average, a less volatile measure, ticked up 250 to 334,000. That remains near pre-recession levels and serves as evidence that job losses have waned.

A total of 3.47 million Americans received benefits as of Jan. 18, down from 3.58 million the week before.

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Unemployment bill stalled anew in Senate

WASHINGTON (AP) — Senate Republicans narrowly blocked the advance of legislation to restore benefits for the long-term unemployed on Thursday for the second time in less than a month, and Democrats said they intended to call yet another vote on the issue.

The White House called the outcome disappointing.

The measure called for a three-month renewal of an expired program that provided up to 47 weeks of federal benefits when state-paid aid runs out, generally after 26 weeks. The cost was estimated at slightly more than $6 billion over a decade. It would have been offset by lowering pension obligations for some companies, a step that would have increased their taxable income.

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Wider trade gap may mean slower Q4 economic growth

WASHINGTON (AP) — The U.S. trade deficit widened in December after hitting a four-year low in November. But for 2013, the gap reached its lowest point since 2009 as exports rose to a record.

Analysts said the larger-than-expected trade deficit for December would likely reduce estimates of growth in the October-December quarter. The government had initially estimated fourth-quarter growth at a 3.2 per cent annual rate. But economists at Barclays say the bigger December gap could reduce that estimate to a 2.8 per cent rate.

The trade deficit rose to $38.7 billion in December, a 12 per cent increase over November, the Commerce Department said Thursday. Exports slipped 1.8 per cent to $191.3 billion. Imports rose 0.3 per cent to $230 billion.

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US productivity grew at 3.2 per cent rate in Q

WASHINGTON (AP) — U.S. productivity growth slowed in the fourth quarter while labour costs kept falling. For the year, productivity turned in another weak gain.

Productivity grew at an annual rate of 3.2 per cent in the October-December period, down slightly from a 3.6 per cent growth rate in the third quarter, the Labor Department reported Thursday. Labor costs fell at a 1.6 per cent rate in the fourth quarter after an even bigger 2 per cent rate of decline in the third quarter.

For the year, productivity rose a slight 0.6 per cent, down from a 1.5 per cent increase in 2012, and the weakest performance since an 0.5 per cent rise in 2011. Labor costs edged up a slight 1 per cent in 2013, continuing a trend of modest gains in labour costs.

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Average US rate on 30-year loan at 4.23 pct.

WASHINGTON (AP) — Average U.S. rates for fixed mortgages fell this week as the latest data continued to indicate a pause in the housing market's recovery.

Mortgage buyer Freddie Mac said Thursday the average rate for the 30-year loan declined to 4.23 per cent from 4.32 per cent last week. The average for the 15-year loan dipped to 3.33 per cent from 3.40 per cent.

Mortgage rates have risen about a full percentage point since hitting record lows roughly a year ago. The increase was driven by speculation that the Federal Reserve would reduce its $85 billion a month in bond purchases. Saying the economy was gaining strength, the Fed pushed ahead last week with a plan to reduce the bond purchases, which have kept long-term interest rates low.

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By The Associated Press=

The Dow Jones Industrial average jumped 188 points, or 1.2 per cent, to close at 15,628 Thursday.

The Standard & Poor's 500 index rose 21 points, also 1.2 per cent, to 1,773. It was the best gain for both indexes since Dec. 18. Both are still down about half a per cent for the week following a steep drop on Monday.

The Nasdaq composite gained 45 points, or 1.2 per cent, to 4,057.

Benchmark U.S. crude for March delivery rose 46 cents to close at $97.84 a barrel on the New York Mercantile Exchange, after earlier rising near $99.

Natural gas prices were volatile again, and futures ultimately fell 10 cents to close at $4.83 per 1,000 cubic feet.

Brent crude, a benchmark for oil sold internationally, gained 94 cents to $107.19 on the ICE exchange in London.

Wholesale gasoline gained 4 cents to $2.68 a gallon and heating oil was unchanged at $3 a gallon.

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