Stocks set to end September surge with more gains

NEW YORK (AP) — Stocks are ending a strong September with more gains today after new reports on unemployment claims, economic growth and manufacturing topped expectations.

Major indexes have been surging all month on signs of incremental improvement in the economy, which have reduced worries the country will fall back into recession.

The Dow Jones industrial average rose nearly 80 points in morning trading. It has risen 9 percent this month, which puts it in line for its best September performance since 1939.

The Labor Department said Thursday that first-time claims for unemployment benefits fell more than economists had predicted last week. Applications are still at levels that indicate employers aren’t necessarily ramping up hiring, but at least the pace of firings seems to be slowing.

Traders were also upbeat after a reading on regional manufacturing in the Chicago area jumped in September. Economists had expected the Chicago Purchasing Managers Index to fall slightly. That bodes well heading into Friday’s monthly report on national manufacturing activity from the Institute for Supply Management.

The government also slightly raised its estimate on second-quarter gross domestic product, the broadest measure of the nation’s economic activity. The government said GDP grew at 1.7 percent pace in the second quarter, better than the 1.6 percent pace estimated a month ago.

U.S. economic growth isn’t expected to pick up much because consumers have cut back on spending while unemployment remains high. Businesses have kept activity in check because of uncertainty surrounding potential tax changes and costs associated with recently passed health care and financial regulatory reforms.