Stocks Opened Higher on Budget Deal Hopes

U.S. stocks opened higher Thursday, as hopes that U.S. political leaders may be inching towards a budget deal that will avoid automatic spending cuts and tax increases gave markets a big boost.  The Dow industrials lately rose 47.34 points, or 0.36%, to 13,032.45. The S&P 500 index climbed 6.73 points, or 0.48%, to 1,416.66. The Nasdaq Composite added 20.25 points, or 0.68%, to 3,012.03.

The U.S. economy grew faster than initially thought in the third quarter as restocking by businesses provided a big boost, but consumer and business spending were revised lower.Gross domestic product expanded at a 2.7 percent annual rate, the Commerce Department said on Thursday, as export growth also helped to offset the weakest consumer spending and first drop in business investment in more than a year.

The number of people who filed new applications for unemployment benefits fell sharply for the second straight week as the effects of Hurricane Sandy continued to fade. Initial jobless claims dropped by 23,000 to a seasonally adjusted 393,000 in the week ended Nov. 24, the Labor Department said Thursday.

Retailers got a lift over the long Thanksgiving weekend, driving gains in November sales despite some pressure earlier in the month from superstorm Sandy, but the results are not expected to match the gains of a year earlier. A total of 52 percent of Black Friday shoppers who participated in a Reuters/Ipsos poll said they had stayed on budget, and 34 percent said they had spent less than planned. Only 14 percent said they had gone over budget.

Hostess Brands Inc. plans to ask for a judge’s approval Thursday to give its top executives bonuses totaling up to $1.8 million as part of its wind-down plans.

Cisco Systems Inc (CSCO) said it will buy privately held network traffic-management software maker Cariden Technologies Inc for about $141 million in cash.

A group of some of bankrupt American Airlines’ (AAMRQ.PK) most significant bondholders said it will not support a standalone restructuring unless a new board is brought in, a move that may increase hurdles for Chief Executive Tom Horton and his team.