LONDON (ShareCast) - Worse than expected US jobless data got the market off to a bad start today but shares rallied strongly after the world’s biggest bond insurer, MBIA, expressed confidence in its ability to retain its AAA rating.

Prices advanced enough to prevent the S&P 500 from having its worst January since records began. The S&P 500 rose 55 points to 1,378 while the Dow Jones 30 rose 207 to 12,650. The NASDAQ Composite pushed on to 2,389, up 40.

Pulte Homes led the advance after the housebuilder said it was “projecting a net loss from continuing operations in the range from $0.15 to $0.30 per share, exclusive of a tax benefit and any additional impairments or land-related charges.” The projected loss was lower than the market had been expecting.

Bond insurer MBIA surged ahead after its CEO said in a conference call that MBIA was best placed of all the bond insurers to retain its AAA rating. The shares had initially fallen sharply after the company posted a record quarterly loss.

Financials were buoyed by MBIA’s statement, with E-trade, Freddie Mac and Fannie Mae to the fore.

Retailers such as Home Depot were wanted after Deutsche Bank raised its rating for the sector on the expectation that interest rate cuts and the government’s financial stimulus package will boost consumer spending.

Mattel, the world’s biggest toy company, surged ahead, dragging rival Hasbro along with it, after beating analysts’ estimates with its fourth quarter sales and profits. Likewise, toolmaker Snap On climbed higher after its fourth quarter earnings per share came in 17 cents ahead of market expectations of Q4 EPS of $0.81.

Oilfield equipment maker Cameron International was marked lower after its guidance figures for earnings per share (EPS) for 2008 came in lower than market expectations. The company expects full year EPS to be in the range of $2.45 to $2.55, compared with analysts’ expectations of $2.64.

Marathon Oil ran out of puff after reporting lower fourth quarter net income of $668m, down from $1.08bn in the corresponding period of 2006.

Coal producer Peabody Energy is targeting first quarter earnings of $0.05 to $0.25 per share, but this disappointed the market which had pencilled in a figure closer to 55 cents for the first quarter.

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