Economic Update — Market Shrugs Off Another Unemployment Uptick
- Apr 03, 2009
Wall Street must be getting desensitized to bad news. While the number of Americans filing new claims for unemployment rose to 669,000 last week from a revised 657,000 in the previous week, the market seemed anything but worried. Much of the optimism might have sprung from the G-20 meeting in London, where the member nations agreed to a $1 trillion boost for the International Monetary Fund, and to closely monitor the global financial system.On the New York Stock Exchange, winners beat losers by more than seven to one on volume of 1.87 billion shares with advancers topping decliners by more than three to one on volume of 2.83 billion shares on the Nasdaq. A variety of stocks gained, including financial shares such as Bank of America, Wells Fargo and Goldman Sachs. But the gains were broad-based, with all but three of the Dow 30 rising, led by IBM, McDonald’s, 3M, Procter & Gamble and United Technologies. A nearly 9 percent spike in oil prices gave a boost to the Dow’s oil components, Chevron and Exxon Mobil. The Dow Jones Industrial Average headed for its best four-week gain since 1933 and the Nasdaq turned positive on 2009 as an uptick in factory orders drew buyers to technology stocks such as Research In Motion and industrial stocks such as Caterpillar. Meanwhile, factory orders rose 1.8 percent in February, echoing increases in home sales and other early signs of a rebound.Investors also kept an eye Thursday on the G-20 meeting in London, which brought together leaders from the world’s largest economies. The United States wasn’t able to persuade Germany and other European countries to boost their economic stimulus packages at the meeting, but thanks to tripling of the current $250 billion to the International Monetary Fund and other development banks and a newly agreed $250 billion trade financing commitment from the G-20, another trillion dollars is being injected into the world economy. Mortgage agencies Fannie Mae and Freddie Mac, seized by the government last fall, had asked the Treasury Department for billions of dollars to cover their fourth-quarter losses and received $15.2 billion to Fannie and $30.8 billion to Freddie on March 31, according to a securities filing. And the Senate has approved a provision calling upon the Federal Reserve to disclose the names of institutions that receive emergency loans. The Fed has yet to comply, citing market stability concerns.