Stocks and exchange traded funds (ETFs) are on a serious, 200-plus point rebound after news that China’s economy has not been slowed by European sovereign debt and a tepid but improving jobless claims report.

Initial jobless claims have continued to disappoint, but only mildly when compared with expectations and last week’s figures, were revised up 6,000. Numbers released Thursday showed claims at 456,000, whereas analysts were expecting around 448,000. The four-week average rose to its highest level in three months to 463,000, the fourth straight weekly increase.

The economic recovery in China received a boost from strong increases in export (up 48.5%) and import (up 48.3%) numbers. News of the increase provides some much needed support for the global economic recovery as a whole by showing that China’s is doing well, avoiding a slow down influenced by continued struggles in Europe. [China ETFs, Rising Wages and the Trade Deficit.]

  • SPDR S&P China (NYSEArca: GXC)

BP (NYSE: BP) shares continue to slide on news that the British oil company may cut its dividend, despite reassurances from the company that it possesses financial flexibility to handle the oil spill in the Gulf of Mexico. Coupled with news that the U.S. Justice Department could be getting involved, BP saw its shares tumble 6.3% today in London trading. This follows a 16% slide on Wednesday. [What BP Oil Spill Means for Investors.]

  • SPDR S&P International Energy Sector (NYSEArca: IPW): BP is 11.8%

The U.S. trade deficit widened to its highest level in 16 months as exports declined for the second time in three months. Up 0.6% from March, the trade deficit rose to $40.3 billion as exports decreased by 0.6% and imports declined 0.4%. Declining exports could slow the efforts toward an economic recovery.

  • SPDRs (NYSEArca: SPY)

Aaron Hurst contributed to this article.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.

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