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The gloomy economic news on Thursday morning wasn't enough to sideline investors, who saw glimmers of hope that helped drive North American stock market indexes higher.


The Dow Jones industrial average closed at 8063.07, up 106.41 points, or 1.3 per cent. The broader S&P 500 closed at 845.85, up 13.62 points, or 1.6 per cent.


Both indexes began the day with losses soon after the investors learned that initial jobless claims in the United States jumped by 35,000 last week to a 26-year high of 626,000. At the same time, same-store sales at retail chains were down in January, with some stores reporting double-digit dips.


The glimmers of hope? MasterCard Inc. reported that its fourth quarter earnings fell 21 per cent - but, reflecting what is more important to the market, the earnings beat analysts' forecasts by a substantial margin. The shares rose 14.1 per cent.


As well, David Trone, an analyst at FPK, said that Goldman Sachs Group Inc. and Morgan Stanley were healthy enough to repay the $10-billion (U.S.) that each received in government bailout funds last year - suggesting to particularly upbeat investors that the beaten-up financial sector may be in better shape than originally feared.


Goldman Sachs rose 5.6 per cent and Morgan Stanley rose 5.4 per cent. Other stocks in the sector followed suit, possibly driven by a rumour that the Securities and Exchange Commission, as part of a government rescue plan, might be on the verge of relaxing an accounting rule that has been forcing financial firms to write down the values of illiquid assets. Bank of America Corp. rose 3 per cent. Citigroup Inc. rose 1.2 per cent.


Meanwhile, Wal-Mart Stores Inc. rose 4.6 per cent after it bucked the trend of declining same-store sales last month, providing yet more evidence that cash-strapped shoppers continue to flock to discount stores.


In Canada, the S&P/TSX composite index closed at 8860.98, up 167.89 points, or 1.9 per cent. Commodity producers were among the biggest movers, after modest gains by gold and oil. Gold rose $12 an ounce, to $914.20. Crude oil rose 85 cents a barrel, to $41.17. Barrick Gold Corp. rose 4.2 per cent, Suncor Energy Inc. rose 1.5 per cent and Canadian Natural Resources Ltd. rose 5.2 per cent.


Financials were also strong, with Royal Bank of Canada rising 2 per cent and Bank of Nova Scotia rising 2.6 per cent.


However, Bombardier Inc. fell 4.6 per cent after the transportation company announced plans to lay off nearly 1,400 workers amid deferrals and cancellations in its business jet market.

Copyright 2001 The Globe and Mail