Wall Street Rebounds On Positive Jobs News
The number of Americans filing for jobless benefits hovered near three-month lows last week and factory activity in the Mid-Atlantic region rebounded this month, pushing stocks on Wall Street higher today after a post-FOMC announcement plunge yesterday.
By Paolo Palazzi-Xirinachs
Thursday, March 20, 2014 - 00:00
As of 2:00PM EDT today in New York, the S&P 500 has gained back 0.6 % to 1,871.42, while the Dow has added 0.7%, to 16,330.3. Both gauges have erased most of yesterday’s declines. Investors were none too thrilled on Wednesday by what they heard from Janet Yellen during her first meeting in charge of the Fed. The Dow fell more than 100 points, while the S&P 500 and Nasdaq also finished lower. Stocks were relatively stable as Yellen started her press conference. But the Dow fell as many as 180 points before recovering after she said the Fed's stimulus program would most likely be finished by the fall and that a rate hike could come as soon as early 2015. Prior to the press conference, the Fed said it will continue trimming, or tapering, its monthly bond buying program by another $10 billion, to $55 billion.
The jobless claims news today suggests that the economy is regaining strength after being hobbled by severe weather. While other data released showed home sales at a 1.5 year low in February, the tight stock of houses on the market that has constrained sales eased for a second straight month, opening the door wider to would-be homeowners. Initial claims for state unemployment aid increased 5K to a seasonally adjusted 320K last week, the Labor Department reported. The rise, which was smaller than most economists surveyed had been expected, kept claims close to the three-month low hit in the prior week. The four-week moving average of new claims - which cuts out volatility to provide a better gauge of underlying economic conditions – hit its lowest level in more than three months.
Not all investor sentiment is invested in local indicators. The markets continue to watch the situation in Ukraine, where the government in Kiev said yesterday it plans to reinforce its eastern border with Russia and withdraw troops from Crimea, ceding control of the Black Sea peninsula as tensions remained high over Russian moves to annex the breakaway region. resident Obama said today the US is imposing financial sanctions on a wider swath of Russian officials and a Russian bank as he authorized further penalties that would directly target sectors of the economy.
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