Thursday, July 28, 2011

Higher markets on lower jobless claims

Dow rose 77, advancers over decliners 2-1 & NAZ gained 33. Once again, bank stocks were market leaders.

S&P 500 Financials Sector Index

Value	201.91
Change	2.31 (1.2%)

The MLP index rose 2 to the 362s & the REIT index was up 2+ to the 245s. Junk bond funds were slightly higher (near their 2011 highs) & Treasuries were stronger bringing the yield on the 10 year Treasury below 3%. Oil fluctuated, not sure what to do, & gold slipped off its record highs.

JPMorgan Chase Capital XVI (AMJ)

The latest daily market update below:

Treasury yields:

U.S. 3-month	0.076%
U.S. 2-year	0.414%
U.S. 10-year	2.951%

CLU11.NYM

...Crude Oil Sep 11

...97.58

....

0.18

(0.2%)

GCQ11.CMX

...Gold Aug 11

....1,607.00

...

8.10

(0.5%)

Photo: Yahoo

The number of people seeking unemployment benefits dropped last week to the lowest level in more than 3 months, a sign the job market may be healing after a recent slump. The Labor Dept reported that applications fell 24K to 398K, the first time applications have fallen below 400K in 16 weeks. The 4-week average dropped to 413K,, the lowest since early Apr. Some of the drop likely reflects seasonal volatility. Applications were elevated earlier this month partly because of temporary layoffs in the auto & other manufacturing industries, which are ending. Many auto companies close their factories in early Jul to prepare for new models. The number seeking unemployment benefits remains higher than would be expected in a healthy economy. The total number receiving unemployment benefits, meanwhile, dipped to 3.7M, that doesn't include millions receiving extended benefits under emergency programs enacted during the recession. All told, 7.65M people received benefits. Some good news on the jobs front.

Jobless Claims in U.S. Decreased to Three-Month Low

Existing home sales were up 2% in Jun as housing is still stuck in its long term slump. The jobless report was encouraging, but it will take more weekly reports to indicate that the Q2 slump has ended. Center stage remains in DC. There will be plenty of posturing & little be decided before Mon evening. Chances are great that there will be no default, although some Reps are talking very tough. But a credit downgrade to AA is a fair bet & that will bring turmoil in the markets for the short term at a minimum. The Greek debt problem (one way or the other) will also have to be resolved shortly