US Stocks Higher; Jobless Claims Fall On Year's Last Trading Day
12/31 10:20 AM
NEW YORK (Dow Jones)--U.S. stocks rose Wednesday in the final trading session of a tumultuous 2008, as market watchers hope for signs of an economic recovery in the new year.
Some relief came asU.S. jobless claims numbers fell by a sharper-than-expected 94,000 to a seasonally adjusted 492,000 in the week ended Dec. 27, the U.S. Labor Department said in its weekly report Wednesday. Economists surveyed by Dow Jones Newswires had expected claims to decline by 11,000.
"It's certainly good news for the market because the decline is below the 500, 000 mark," said Frank Lesh, futures analyst and broker at Futurepath Trading. " It's nice to have a little bit of relief at year end."
Still, many remain cautious looking to the new year. Despite promises of rescue packages and other stimulus plans from the incoming Barack Obama administration, "there is still too much optimism about what this economy can generate in the second half of 2009," said Joseph Battipaglia, head equity strategist for the private-client group at Stifel Nicolaus.
Public-sector jobs are being created in lieu of private-sector expansion and " while you may applaud the fact that we don't go down deeper quickly ... you're not getting anything that's generating growth either," Battipaglia said.
The Dow Jones Industrial Average recently gained 63 points, or 0.7%, to 8731. The Standard & Poor's 500 added 6, or 0.7%, to 897, while the technology-heavy Nasdaq Composite rose 17, or 1.1%, to 1567.
U.S. markets ended higher Tuesday, helped by a late rally from financial stocks and further government aid for GMAC. The Dow Jones Industrial Average closed up 184 points, but was still down around 35% for the year going into Wednesday's session.
The S&P 500 ended Tuesday up 21 points, but is down 40% year-to-date. The Nasdaq Composite rose 40 points; its decline for the year is around 42%.
Still ahead is the U.S. Department of Energy's oil inventories expected at 10: 35 a.m. EST. Crude oil futures recently shed 2.1% to $38.20.
Martin Slaney, head of derivatives at GFT Global Markets in London, said oil and gas stocks may pull back as Nymex crude oil futures lost ground Wednesday in Asia.
The dollar was steady against the yen and edged higher against the euro, which slipped 0.5% to $1.407.
Meanwhile, the volume of residential mortgage applications filed last week was essentially unchanged on a seasonally adjusted basis from the prior week, even as the interest rates charged on mortgages fell further, data compiled by the Mortgage Bankers Association showed Wednesday.
Applications were up 155% on an unadjusted basis for the week ended Dec. 26, compared with the same week last year, according to the Washington-based MBA's latest survey. Filings to refinance existing mortgages dipped 0.4% on a week-to- week basis, while applications for mortgages to purchase homes were up a seasonally adjusted 1.4%.
Late Tuesday the Federal Reserve said it will begin buying mortgage securities backed by Fannie Mae (FNM:$0.7267,$0.0367,5.32%) , Freddie Mac (FRE:$0.72,00$0.03,004.35%) and Ginnie Mae in early January. Fannie Mae (FNM:$0.7267,$0.0367,5.32%) shares rose 5% to 73 cents, while Freddie Mac (FRE:$0.72,00$0.03,004.35%) rose 6% to 72 cents.
Asian markets ended 2008 on a high note, with Australia's S&P/ASX 200 closing up 1.9%. In Europe, the French CAC 40 index rose 1.4%.
-By Kejal Vyas and Aja Carmichael, Dow Jones Newswires; 201-938-5460; kejal.vyas@dowjones.com
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(END) Dow Jones Newswires
12-31-081020ET
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