Nov. 5 (Bloomberg) -- The Dow Jones Industrial Average rose the most since July after U.S. jobless claims and productivity beat economists’ estimates. Gold rallied for a fourth day, while the dollar and Treasuries were little changed.

“We’ve actually seen more good news than bad across a broad spectrum of economic data,” said Art Hogan, the chief market analyst at New York-based Jefferies & Co. “We look at the initial jobless claims as another piece of economic data we’re pretty happy with.”

The Dow increased 203.82 points, or 2.1 percent, to 10,005.96 at 4:01 p.m. in New York for the biggest advance since July 23. The Standard & Poor’s 500 Index rose for a fourth day, adding 20.13 points, or 1.9 percent, to 1,066.63. More than nine stocks gained for each that fell on the New York Stock Exchange.

Cisco Systems Inc. advanced after earnings topped analysts’ estimates. IMS Health Inc. surged 23 percent after agreeing to be acquired. All 30 stocks in the Dow gained, led by American Express Co.

All 10 industry groups in the S&P 500 advanced at least 0.6 percent as the Labor Department said initial unemployment claims fell to 512,000 last week and productivity surged at the fastest pace in six years. The department’s measure of worker efficiency jumped at a 9.5 percent annual rate, topping the highest estimate of economists surveyed by Bloomberg.

Cisco Beats Estimates

Cisco, the biggest maker of networking equipment, added 2.8 percent to $23.93. The company’s net income fell 19 percent to $1.79 billion, or 30 cents a share, in the first quarter, which ended Oct. 24. Excluding stock compensation and some other costs, profit was 36 cents, beating the 31-cent average estimate in a survey of analysts.

Cisco Chairman and Chief Executive Officer John Chambers, one of the first technology leaders to herald the recession two years ago, said he now sees a global economic recovery, fueling a rebound in his company’s sales this quarter.

“Cisco is talking about a recovery around the world, Chambers is being very optimistic and people listen to him,” said William Dwyer, chief investment officer at Baltimore-based MTB Investment Advisors, which oversees $13 billion. “People are a little cautious, they like what they’re seeing, but there’s an awful lot built into the market.”

IMS Health Inc. surged 23 percent to $20.73 for the top gain in the S&P 500. The provider of prescription data to drugmakers and analysts agreed to sell itself to investment funds managed by TPG Capital and the CPP Investment Board for $22 a share, or about $5.2 billion. IMS shareholders will receive $22 a share in cash, the company said.

Bullion Rally

Gold futures for December delivery rose $2, or 0.2 percent, to $1,089.30 an ounce. Bullion climbed to a record $1,098.50 an ounce yesterday.

Crude oil for December delivery fell 78 cents, or 1 percent, to $79.62 a barrel on speculation that a government report tomorrow will show that the U.S. unemployment rate climbed last month, depressing demand for commodities.

“The employment figure tomorrow will be the granddaddy of them all,” said Jim Ritterbusch, president of Ritterbusch & Associates, a Galena, Illinois, consultant. “There’s just an unwillingness to get in until then.”

U.S. employers cut 175,000 jobs last month, according to the median of estimates in a Bloomberg News survey before tomorrow’s Labor Department report. The jobless rate probably climbed to 9.9 percent, the highest since 1983, according to the survey.

Risk Aversion

The dollar traded at $1.4877 per euro compared with $1.4861 yesterday. It touched $1.4917, the weakest level since Oct. 27. The euro gained 0.1 percent to 135.03 yen, from 134.85. The dollar was little changed at 90.76 yen, compared with 90.72.

Over the past few months, the dollar tended to depreciate against the euro on positive U.S. economic reports as demand declined for the safety of the world’s main reserve currency. Investors are worried about a disappointing payroll report tomorrow, said Boris Schlossberg, director of currency research with online currency trader GFT Forex, in New York.

“There’s a big fear the number could be negative, which would create a lot of risk aversion,” Schlossberg said. “People are afraid to put on long euro positions ahead of the number. But if the number proves to be positive they’ll be a lot more confident in putting on risk trades.”

The difference between 2- and 10-year Treasury note yields steepened to 265 basis points, the widest amount since Sept. 17, as the U.S. prepared to sell a record $81 billion of notes and bonds next week.

The 10-year note yield rose one basis point, or 0.01 percentage point, to 3.53 percent, according to BGCantor Market Data. The 3.625 percent security maturing in August 2019 fell 2/32, or 63 cents per $1,000 face amount, to 100 3/4.

To contact the reporter on this story: Matt Townsend in New York at mtownsend9@bloomberg.net

Last Updated: November 5, 2009 17:17 EST