Wall St up on euro zone yields, earnings bets

US stocks edged higher in early trading on Thursday as concerns about rising yields in some euro zone countries eased and on bets corporate America will beat a lowered bar of earnings expectations.

The S&P 500 edged above its 50-day moving average in a sign traders may see the recent pullback of nearly 5% as an opportunity to catch up with the benchmark's performance. The index is up almost 10% year-to-date.

New US claims for unemployment benefits rose last week to their highest level since January, but some economists cited the Easter holidays for the spike in claims and expected applications to continue to trend lower.

Benchmark bond yields in Italy and Spain ticked lower following an Italian auction of three-year notes, while the euro rose against the US dollar, signaling easing near-term concern about the euro zone's debt troubles.

"Auctions (in Europe) have not been disastrous and that was good enough," said Art Hogan, managing director at Lazard Capital Markets in New York. "Yields are not optimal but good enough to not cause panic."

Basic materials shares led gains as the euro strengthened against the US dollar and commodity prices advanced. The S&P materials sector added 1.5%. US Steel and Freeport-McMoRan Copper & Gold rose more than 4%.

Early into earnings season, results are beating Wall Street expectations at a fast clip. Analysts say the expectations could have been lowered too much and stocks can seem cheap after a near 5% pullback on the S&P.

"What early reports we have already show a pretty good beat rate," said Jim Paulsen, chief investment officer at Wells Capital Management in Minneapolis. "I wonder if we're going to beat the low hurdle of earnings."

The Dow Jones industrial average gained 118.30 points, or 0.92%, to 12,923.69. The S&P 500 Index rose 12.90 points, or 0.94%, to 1,381.61. The Nasdaq Composite added 33.52 points, or 1.11%, to 3,049.98.

Market participants also cited expectations that China's gross domestic product would surprise on the upside as a reason for basic materials shares to rise.

"Basic materials and industrials could be up on bets the Chinese GDP report tonight might be better than expected," Wells Capital's Paulsen said.

Shares in Hong Kong and Shanghai rose overnight on optimism about easier monetary policy in China and a better-than-expected economic outlook.

The US Federal Reserve is running through data to determine if last month's soft non-farm payrolls report was a weather-related setback or a sign the recovery is losing momentum, said New York Federal Reserve Bank president William Dudley.

Dudley left the door open to additional stimulus measures if the economic recovery gets off track. Previous rounds of quantitative easing have been a boost for equities and other risk assets.