Markets Close With Moderate Gains Despite Rise in Jobless Claims
Thursday, May 14, 2009; 4:27 PM
U.S. stock markets traded moderately higher today despite a government report that the number of weekly jobless claims had increased.
The blue-chip Dow Jones industrial average closed up 0.6 percent, or 46 points, while the broader Standard & Poor's 500-stock index rose 1 percent, or 9 points. The tech-heavy Nasdaq rose 1.5 percent, or 25 points.
The lift came as the Labor Department reported that new claims for unemployment jumped to 637,000, from a revised 605,000 the previous week, potentially adding to investor concerns that the economy might not have yet reached a bottom. The number of people overall seeking unemployment benefits also grew faster than expected, increasing to 6.56 million from 6.36 million.
Stocks took a dive yesterday on worse-than-expected monthly sales for April.
"The initial jobless claims number moved in the wrong direction from a recovery perspective, but I think that often after a significant sell-off -- like the one we had yesterday -- it is not surprising that you get some stability [reentering] the markets," said Alan M. Gayle, senior investment strategist at RidgeWorth Investments. "The market had a strong reaction to the retail sales number yesterday, so the weekly jobs claims number, which can be volatile, is just not stirring the same kind of reaction."
Wall Street has rallied strongly since hitting a low in early March on a series of better-than-expected economic reports and on optimism that the worst of the financial crisis for some of the nation's largest banks might have passed. This week that optimism has faltered.
A separate government report this morning showed that wholesale inflation jumped more than expected in April. Wholesale prices climbed 0.3 percent last month, according to the producer price index.
Overseas markets were mixed. London's FTSE was up 0.7 percent, or 31 points, while Germany's DAX was up 0.2 percent, or 11 points. Japan's Nikkei was down sharply, by 2.6 percent, or 247 points.