NEW YORK SHARES

WASHINGTON — Wall Street is betting that the Federal Reserve and other central banks are ready to roll out programs to help protect the global economy from financial market turmoil.

Investors have been piling into the stock market this week on hopes that more stimulus programs might be in the works amid negative U.S. economic snapshots and continued uncertainty in Europe.

Stocks in the U.S. rallied Thursday, with the Dow Jones industrial average charging up 155.53 points, or 1.2%, to 12,651.91. Broader stock benchmarks also jumped higher.

The rally was pinned on reports that central banks are preparing stimulus programs in advance of Greek national elections Sunday that could lead to an exit from the Eurozone. The Bank of England and British Treasury unveiled plans Thursday to boost liquidity to protect its financial markets.

"Everybody's talking about Greece," said Rebecca Rothstein, managing director at Morgan Stanley Smith Barney in Beverly Hills. "Stabilizing would be a welcome relief to whatever the outcome is."

Closer to home, the combination of rising jobless claims and easing consumer prices was giving the Fed more reason to spur economic growth by pumping money into the financial system. The central bank's policy-setting committee meets next week.

Policymakers will be wrangling with the double dose of uninspiring economic data delivered Thursday.

"The Federal Reserve has been quiet about its intentions at next week's meeting, but inflation hawks will have less ground to stand on, given the recent weakness in consumer prices," said James Bohnaker, an analyst at Moody's Analytics.

The Labor Department said new jobless claims rose again last week, marking the fifth increase in the last six weeks. Rising claims for unemployment benefits suggest that layoffs are heading higher, which would be consistent with the spring slowdown in job growth seen in the latest monthly employment reports.

Separately, the department's Bureau of Labor Statistics reported that the consumer price index dropped a larger-than-expected 0.3% in May from the prior month. It was the largest month-over-month decline in this inflation measure since late 2008, and it was driven mostly by a steep 6.8% fall in average gasoline prices.

Although falling energy prices are giving consumers some much-needed relief, Mesirow Financial economist Diane Swonk pointed out that there's a downside to this development.

"We welcome lower prices at the pump," she said in a note to clients, "but not the reason we have them, which is economic weakness and anxiety about the future."

Some have argued that there already were reasons enough for the Fed to pull the trigger on another round of bond purchases or some other stimulus action, with the European debt crisis and fiscal and political uncertainties at home weighing on confidence, hiring and consumer spending.

But Fed Chairman Ben S. Bernanke has said the recent deceleration in job growth may reflect the end of "catch-up hiring" by employers who aggressively slashed payrolls because of the 2007-09 recession.

More important, Bernanke also has said additional monetary stimulus might not help the economy very much, given that interest rates already are at historical lows. The Fed has a dual mandate, to control inflation and maximize employment, and Bernanke's critics and some of his Fed colleagues have expressed concerns that more stimulus could result in runaway inflation in the future.

The Fed's inflation target is 2%. Thursday's report showed that for all goods and services, the change in the consumer price index fell to 1.7% in the 12-month period that ended in May — the lowest rate since early 2011.

Meanwhile, the so-called core inflation rate — the Fed's preferred measure, which excludes the volatile energy and food items — held steady at 2.3% for the third straight month, as prices for used cars, clothes and medical services rose.

"I don't think there's a deflation concern as core inflation is still running at 2.3%, which will worry some policymakers," said Chris Williamson, chief economist at Markit, a financial data services company based in London. "For the same reason, today's data by no means opens the door completely for further Fed stimulus, it's just nudged it a little more open."

But analysts expect core inflation to slide steadily lower to the Fed's target of 2% as lower energy and commodity prices and a weaker economy tamp down inflation for used cars and clothes.

Thursday's jobless claims data showed that new filings for benefits rose by 8,000 last week to a seasonally adjusted 386,000 claims — about 20,000 more than the level earlier this year when the job market seemed to be gaining steam.

Jobless claims data can swing up and down from week to week, but the government reported no special factors such as a holiday for the increase in filings. The less volatile four-week moving average of new jobless claims also rose, to 382,000, the highest level since late April.

"This is disturbing for employment in June, as it suggests that the labor market is further weakening," Swonk said. "This is being noticed by the Federal Reserve."

don.lee@latimes.com

andrew.tangel@latimes.com

Lee reported from Washington and Tangel from New York.

WASHINGTON — Federal regulators launched an investigation into the financial abuse of the elderly, citing a new report that advisors, planners, family members and others were ripping off seniors more than ever.

Americans over 60 lost at least $2.9 billion in 2010 to financial exploitation — ranging from simple home repair scams to complex insurance swindles. That figure was up 12% from 2008, according to a study released Thursday by MetLife Mature Market Institute, the National Committee for Prevention of Elder Abuse and Virginia Tech University.

The rise in abusive tactics led the Consumer Financial Protection Bureau to begin looking into the types of scams affecting older Americans and coming up with the best ways to prevent them. A specific focus will be on the credentials of people who tout themselves as financial advisors.

"The silent crime of financially exploiting the elderly is widespread, and it is devastating. It is critical for us to act," Richard Cordray, the agency's director, said at a White House forum Thursday ahead of World Elder Abuse Awareness Day.

"The generation that rebuilt and sustained this nation out of a devastating Depression, the dark hours of World War II and the anxious fears of the Cold War deserve our care now," Cordray said.

Tougher oversight by regulators is needed to prevent financial predators from preying on vulnerable elderly victims, said Patricia L. McGinnis, executive director of California Advocates for Nursing Home Reform, a San Francisco group that often deals with financial abuse.

"The bottom line is, you need to go after the predators. You need to punish them and you need to convict them," she said. "Put them in jail and make an example of them, but more importantly, get the money back for that victim. Make them whole again."

McGinnis described efforts by regulators and advocates to prevent the scamming of older Americans as a game of Whac-A-Mole.

A recent scam enticed senior citizens to put large amounts of savings into deferred annuities, reducing their savings to qualify for a particular federal veterans benefit. The veteran might get $1,000 a month from the benefit, but loses access to the cash for years. Meantime, the annuity salesperson earned a commission of 8% to 12%, she said.

Victims often are reluctant to fight back.

"I can't tell you the times I talk to people and they say, 'It was my own fault,'" McGinnis said. "They are very embarrassed."

The scams have increased as the economy has struggled. Survey results released this week by the nonprofit Investor Protection Trust found that 84% of experts who deal with financial exploitation of the elderly said the problem has worsened.

But there is a lack of comprehensive information on the problem, which the consumer bureau's inquiry could help solve, said Elizabeth Costle, director of the consumer and state affairs team at the AARP Public Policy Institute.

Financial predators often target the elderly because they are viewed as gullible, Cordray said.

"Many seniors have routines, and their predictable patterns make them easier targets for predators," Cordray said. "Abusers often assume that the victim will be too embarrassed or too frail to pursue legal action against them, and unfortunately that assumption is too often proven to be correct."

The agency's inquiry seeks comments from the public on several issues. They include detailing the unfair, deceptive and abusive practices targeted at the elderly, finding the types of financial planning resources, and evaluating the credentials of financial advisors. The agency will be accepting public comments until Aug. 13.

Cordray said that some people who tout themselves as experts on elderly financial issues have had only a few hours of inadequate training.

"We need to distinguish between the true experts and those engaged in predatory conduct," he said.

The qualifications of financial advisors are important as new retirees must decide what to do with lump-sum 401(k) payouts and often must juggle many complex options, Costle said. The ability to understand those options gets more difficult as people age.

"As people get older, particularly up into their 80s ….they're just less able to process financial information," she said. "They're more likely to be trusting of people and they open themselves up to more abuse, which is perpetrated both by strangers and by caregivers and family members who are close to them."

Congress and the White House have increased their focus on the issue.

Lawmakers included the Elder Justice Act in the 2010 healthcare reform law to coordinate federal efforts. As part of the law, Health and Human Services Secretary Kathleen Sebelius on Thursday announced $5.5 million in grants to states to "test ways to prevent elder abuse, neglect and exploitation."

jim.puzzanghera@latimes.com