NEW YORK (AP) — Stocks are closing higher after unemployment claims unexpectedly dropped and worries over the debt crisis in Europe eased.

Greece named a new prime minister Thursday and Italy borrowed $6.8 billion at lower interest rates than analysts expected. Italy's benchmark rate dropped below 7 percent after spiking above that level Wednesday.

The Dow Jones industrial average rose 113 points, or 1 percent, to close at 11,894. It plunged 389 points Wednesday as talks in Greece to name a new prime minister broke down.

The S&P 500 index gained 11, or 0.9 percent, to 1,240. The Nasdaq rose 4 points, or 0.1 percent, to 2,625.

Two stocks rose for every one that fell on the New York Stock Exchange. Trading volume was below average at 3.9 billion.