The US market opened higher Thursday morning amid a variety of data.
Thursday, January 29, 2015
Weekly jobless claimed fell to the lowest mark since 2000, the Federal Reserve announced it would not raise interest rates before June, and investors await more earnings and home-sales data.
Within five minutes of the open, the Dow was up 0.3%, the S&P 500 gained 0.18% and the Nasdaq earned nearly 0.1%. However, stocks fluctuated shortly thereafter, with both the Nasdaq and the S&P 500 moving into the red.
Jobless claims beat expectations
The unemployment report for the week ending January 24 came in much stronger than expected, MarketWatch reported. The Labor Department indicated the number of US citizens who applied for jobless benefits fell by 43,000 to 265,000 in total – the lowest level in 14 years. It was also the sharpest weekly decline since November 2012.
Economists polled by MarketWatch forecast the claims would come in at 296,000, well above the final reading. Experts pointed out that the data should reflect underlying strength in the market for the coming weeks. The claims also reinforced the Fed’s assertion that the labor market is strong.
Fed wraps up 2-day meeting
On Wednesday, the Federal Reserve emerged from its 2-day meeting with the news that it would raise interest rates no sooner than June at the earliest, the New York Times reported. However, the Fed gave no indication of the latest-possible date for a rate hike, leaving the door open to conjecture.
For over a year, the Fed has alluded to the summer of 2015 as the time to hike interest rates. But until they provide a more specific date, analysts will speculate as to when the increase will arrive. While the difference of a few months might be significant to investors, the Fed does not believe it will make a huge difference in terms of the economy. The bank will wait until the time is right.
“They don’t want to exclude June from the range of options at this point,” Tim Duy, an economist at the University of Oregon, told the New York Times. “June is still five months off, and they have no intention of deciding just yet.”
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