Dow rose 84, advancers over decliners 2-1 & NAZ was up 7. The Financial Index gained 3 to the 216s, within striking distance of its 2012 high reached 3 weeks ago. The MLP index slipped a fraction to just above 410 (only 1 below its record highs) & the REIT index was off a fraction in the 262s. Junk bond funds were mixed & Treasuries eased back. Oil rebounded after the big decline yesterday. Gold jumped to the highest in
almost 11 months as the ECB said it is ready
to start buying gov bonds, boosting demand for the
precious metal as a store of value.
Photo: Yahoo
The number filing new claims for unemployment benefits rose slightly last week. Initial claims for state unemployment benefits climbed 4K to 367K according to the Labor Dept, below expectations for a rise to 370K. The 4 week moving average was unchanged at 375K. Despite fears of tighter fiscal policy in Jan, there is little sign that companies are responding by laying off workers on a wide scale. The estimate for the jobs report tomorrow is that employers are expected to have added 113K jobs in Sep, an increase from 96K in Aug, with the unemployment rate edging up by a tenth of a percentage point to 8.2%. The anticipated modest improvement in labor market conditions has also been telegraphed by increases in measures of manufacturing & service sector jobs in Sep. In addition, payrolls processor ADP has reported better than expected private sector jobs gains in Sep. The report showed the number still receiving benefits under regular state programs was unchanged at 3.28M, the first time since Dec last year that continuing claims were unchanged.
Initial Jobless Claims in U.S. Increase From Two-Month Low
Photo: Bloomberg
Orders to US factories fell in Aug, mostly because of a sharp drop in volatile aircraft orders. The decline offset an increase in orders that reflect corp investment plans. The Commerce Dept said that factory orders fell 5.2% in Aug, the biggest drop in more than 3 years, largely because demand for commercial aircraft plunged. That pulled down orders for long-lasting manufactured goods 13.2%. In one positive sign, orders for business equipment & software rose 1.1%, after 2 steep declines. The value of orders for non-durable goods, which include food, clothing, & gas, rose 2.2%, mostly because gas prices were higher. The manufacturing sector is sending mixed signals. The weak factory goods report suggests businesses are getting more cautious. But a survey of purchasing managers on Mon showed that manufacturing activity expanded in Sep after 3 months of declines. Factories received more new orders in Sep & also increased hiring, indicating that factory activity may recover after a summer slowdown. Auto sales jumped last month to nearly 1.2M, an increase of 13% compared to a year earlier in a sign consumers are still willing to spend on expensive goods, even as job growth remains weak.
Orders to U.S. Factories Plunged on Airplanes, Computers
Photo: Bloomberg
Mario Draghi said the ECB is ready to start buying gov bonds as soon as the necessary conditions are fulfilled, putting the onus on Spain to decide whether it wants a bailout. The ECB is ready to undertake Outright Monetary Transactions “once all the prerequisites are in place,” Draghi said after policy makers left the benchmark interest rate at a historic low 0.75%. The plan has “helped to alleviate tensions over the past few weeks” & “now it’s really in the hands of governments.” A month after Draghi unveiled the unprecedented bond- purchase plan to lower yields on gov debt, Spain, the country most likely to take up the offer, is still mulling whether it wants to accept the conditions attached. At the same time, the euro-area economy probably entered a recession in Q3 as the sovereign debt crisis damped spending & investment.
While markets are feeling good, Dow was still not able to breakaway from the 13.5K trend-line it has been stock on for 3 weeks. The jobless data was so-so although at this level, the unacceptable unemployment rate will continue. Mario is ready to buy bonds when Spain asks seems like a weak reason to bring out buyers with a drab jobs report coming tomorrow & uncertain earnings reports next week. But bulls are pushing Dow towards its 4 year highs above 13.6K. Not sure how long they can keep control over the markets.
AMJ (Alerian MLP Index tracking fund)
Treasury yields:
U.S. 3-month |
0.086% | |
U.S. 2-year |
0.238% | |
U.S. 10-year |
1.644% |
| CLX12.NYM | ...Crude Oil Nov 12 | ...88.97 | ..... 0.83 | (0.9%) |
| GCV12.CMX | ...Gold Oct 12 | ......1,787.90 | ... 10.60 | (0.6%) |
Get the latest daily market update below:
The number filing new claims for unemployment benefits rose slightly last week. Initial claims for state unemployment benefits climbed 4K to 367K according to the Labor Dept, below expectations for a rise to 370K. The 4 week moving average was unchanged at 375K. Despite fears of tighter fiscal policy in Jan, there is little sign that companies are responding by laying off workers on a wide scale. The estimate for the jobs report tomorrow is that employers are expected to have added 113K jobs in Sep, an increase from 96K in Aug, with the unemployment rate edging up by a tenth of a percentage point to 8.2%. The anticipated modest improvement in labor market conditions has also been telegraphed by increases in measures of manufacturing & service sector jobs in Sep. In addition, payrolls processor ADP has reported better than expected private sector jobs gains in Sep. The report showed the number still receiving benefits under regular state programs was unchanged at 3.28M, the first time since Dec last year that continuing claims were unchanged.
Initial Jobless Claims in U.S. Increase From Two-Month Low
Orders to US factories fell in Aug, mostly because of a sharp drop in volatile aircraft orders. The decline offset an increase in orders that reflect corp investment plans. The Commerce Dept said that factory orders fell 5.2% in Aug, the biggest drop in more than 3 years, largely because demand for commercial aircraft plunged. That pulled down orders for long-lasting manufactured goods 13.2%. In one positive sign, orders for business equipment & software rose 1.1%, after 2 steep declines. The value of orders for non-durable goods, which include food, clothing, & gas, rose 2.2%, mostly because gas prices were higher. The manufacturing sector is sending mixed signals. The weak factory goods report suggests businesses are getting more cautious. But a survey of purchasing managers on Mon showed that manufacturing activity expanded in Sep after 3 months of declines. Factories received more new orders in Sep & also increased hiring, indicating that factory activity may recover after a summer slowdown. Auto sales jumped last month to nearly 1.2M, an increase of 13% compared to a year earlier in a sign consumers are still willing to spend on expensive goods, even as job growth remains weak.
Orders to U.S. Factories Plunged on Airplanes, Computers
Mario Draghi said the ECB is ready to start buying gov bonds as soon as the necessary conditions are fulfilled, putting the onus on Spain to decide whether it wants a bailout. The ECB is ready to undertake Outright Monetary Transactions “once all the prerequisites are in place,” Draghi said after policy makers left the benchmark interest rate at a historic low 0.75%. The plan has “helped to alleviate tensions over the past few weeks” & “now it’s really in the hands of governments.” A month after Draghi unveiled the unprecedented bond- purchase plan to lower yields on gov debt, Spain, the country most likely to take up the offer, is still mulling whether it wants to accept the conditions attached. At the same time, the euro-area economy probably entered a recession in Q3 as the sovereign debt crisis damped spending & investment.
While markets are feeling good, Dow was still not able to breakaway from the 13.5K trend-line it has been stock on for 3 weeks. The jobless data was so-so although at this level, the unacceptable unemployment rate will continue. Mario is ready to buy bonds when Spain asks seems like a weak reason to bring out buyers with a drab jobs report coming tomorrow & uncertain earnings reports next week. But bulls are pushing Dow towards its 4 year highs above 13.6K. Not sure how long they can keep control over the markets.
Dow Jones Industrials
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