Stocks Make Small Gains Upon New Jobless Data

Stocks made modest gains today as the Labor Department released better-than-expected weekly jobless claims data and Treasury Secretary Timothy F. Geithner faced tough lines of questioning on Capitol Hill.

The blue-chip Dow Jones industrial average gained 0.69 percent, or 58 points, while the broader Standard & Poor's 500-stock index was up 0.84 percent, or 7.66 points. The tech-heavy Nasdaq Index was flat, losing 0.02 percent, or .34 points.

Initial claims for unemployment benefits increased by 3,000 to 608,000 for the week ending June 13. Continuing claims dropped by 148,000 to 6,687,000 for the week ending June 6. The 2.2 percent decline in continuing claims is the first drop since the beginning of the year and the largest percentage decline since February of last year, Abiel Reinhart of J.P Morgan Chase said in a research note yesterday morning.

"It's an indication that while unemployment will remain high, certainly we should see less and less joblessness going forward," said Peter Cardillo, chief market economist with New York-based Avalon Partners. "And that's, I think, good news."

Treasury Secretary Timothy F. Geithner testified before the Senate banking committee on the administration's plan to reform regulations yesterday where he faced skepticism over the proposals.

Simply put by Sen. Jim Bunning (R-Ky.), "What makes you think the Fed will do better this time around?"

Geithner was scheduled to appear before the House financial services committee in the afternoon, but his testimony was postponed.

Although the markets have rallied since March, stocks have struggled most of this week, drifting slightly downward.

"I kind of suspect that going into next week as we approach the end of the quarter, we'll probably see the market try to regain some of the losses of this week," Cardillo said.

Investors seemed encouraged by positive economic data released today.

The Conference Board reported leading economic indicators for the U.S. increased in May for the second straight month.

"The recession is losing steam," said Ken Goldstein, a Conference Board economist, in a statement. "If these trends continue, expect a slow recovery beginning before the end of the year."

The Philly Fed index, which tracks manufacturing in the Philadelphia area, rose to minus 2.2 from minus 22.6, the highest reading since September, said Ian Shepherdson, chief U.S. economist for High Frequency Economics, in a research note.

Crude oil prices were up .39 percent to $71.31 per barrel.

Overseas markets were mixed. London's FTSE was flat, while the Dax in Germany gained 0.78 percent. Japan's Nikkei lost 1.4 percent.