Stocks rise despite surge in unemployment claims

Dow rose 175, advancers over decliners almost 4-1 & NAZ gained 30. Markets were encouraged that grim unemployment numbers may push congress to quickly pass a stimulus package. Spend now, worry later is behind this kind of thinking. It would be nice if they got it right in heavily charged political times.


S&P 500 FINANCIALS INDEX rose on expectations of a TARP II to help save banks.

Value 128.75

Change 7.24

% Change 6.0%

MLPs, REITs & junk bonds changed little in today's rally. Oil fell below 40 on more fears about the worldwide recession:

CLH09.NYM

...Crude Oil Mar 09

....39.44

... 1.73 .......(4.2%)

The jobless rate jumped to 7.6% last month from 7.2% in Dec. Last month’s losses cap the first time since records began in 1939 that job cuts exceeded half a million in 3 consecutive months. 598K jobs were lost, substantially larger than the forecast of 540K (the jobless rate was projected to jump to 7.5%).

•U.S. Jobless Rate Rises to 16-Year High of 7.6%; Payrolls Fall by 598,000


Dividends from the S&P 500 are projected to drop 13% in 2009, the biggest plunge in 67 years. Dividends are very important in evaluating stock values. However even greater care is needed today when choosing investments for dividend yields. The very strong will persevere.

•S&P 500 Dividends May Decline 13.3% This Year in Steepest Drop Since 1942


Toyota, now the world's largest car maker, said it may suffer a $5B loss (triple earlier estimates). It is being hurt by the severe recession in Japan & the strong Japanese ¥ (which in the last few days has weakened modestly to 91½ to the dollar).

•Toyota Widens Loss Forecast on Plunge in Global Demand, Strengthening Yen


Last night we were told the Senate would burn the midnight oil to pass the legislation. But, instead, they went home after 8 PM, maybe to watch the president's speech on TV. Now there is talk that the stimulus package will be passed in another week. Don't hold your breath. There is a lot of controversy about the huge size of the numbers & how much will be spent in coming months vs coming years.

•Grassley Says Stimulus Bill Will Pass by Mid-February as Job Losses Surge