Thursday’s Market Recap: Stocks Up; Jobless Claims Hit 7-Year High

The Dow Jones Industrial Average (^DJI) rose 196.86 points or 1.82% to close the day at 11,022.06. The Nasdaq (^IXIC) rose 1.43% or 30.89 points to close at 2,186.57. The S&P 500 (SPY) closed at 1,209.18, up 23.31 points or 1.197%. Oil prices rose $2.29 or to settle at $108.02 a barrel, as investors wonder if the world’s largest energy consuming nation can straighten out the details of the $700 billion rescue plan and avoid a recession, which would greatly cut into fuel demand. The Dollar continued its slight decline versus the Euro, and is currently trading at 0.6845 vs. the Euro and gained slightly against the Yen from yesterday, trading at 106.39 vs. the Yen. Gold fell off $11.30 or 1.27% today to settle at $877.70 per ounce. The 10 year Treasury note rose 241 basis points to 3.8620% today.

The Labor Department reported today that new claims for unemployment benefits, better known as jobless claims, for the week of September 20, increased by 32,000 claims to a seasonally adjusted 493,000, much greater than analysts’ expectations of 445,000 claims. Jobless claims have hit a 7 year high after reaching 517,000 after the 9/11 terrorist attacks. Economists attribute the increase in claims to our weakening economy and the after effects of Hurricane Ike and Gustav. Weekly jobless claims have now topped 400,000 for 10 straight weeks, which many economists see as a sign of recession. The number of people continued to draw unemployment benefits last week was 3.54 million, up 63,000 from the week before.

The Commerce Department reported that new orders for big-ticket manufactured goods fell by 4.5% last month, led by a big decline in demand for commercial aircrafts. This was the largest decline since January’s drop off of 4.7%. New home sales declined almost 11.5% in August, pushing sales down to a seasonally adjusted annual rate of 460,000, the slowest pace since January 1991. New home sales were only expected to decline by 1%. The average new home price declined 11.8% in August to to $263,900, the biggest one month decline in history. The median home price dropped 5.5% in August to $221,900.

Rates on 30 year mortgages increased this week, jumping up to 6.09% after 5 weeks of decline. Freddie Mac reported today that the average 30 year fixed-rate mortgage rose to 6.09% this week, up from 5.78% last week. Last week’s rate was the lowest 30 year mortgage rate since February. The jump above 6% was attributed to the current financial debacle which has turned Wall Street upside down. Rates for five year adjustable-rate mortgages averaged 6.02% this week, up from 5.67% the previous week. 15 year fixed-rate mortgage rates rose to 5.77%, up from 5.35% last week. 15 year fixed-rate mortgages are a very popular choice for refinancing. A year ago, rates for 30 year mortgages were 6.42%, rates for 15 year mortgage were 6.09%, and rates for five year adjustable-rate mortgages were 6.15%.

Disclosure: None

Subscribe by RSS Subscribe by Email