Stocks climb back as jobs report overshadows budget debate
US stocks ended their worst losing streak in nine months after jobless benefits unexpectedly dropped last week, overshadowing a budget stalemate that could result in a government shutdown next month.
Fewer Americans are filing for jobless benefits these days, according to a weekly report from the Labor Department. Unemployment claims fell 5,000 last week, sending the four-week average to 308,000. The news came 24 hours ahead of this week’s second confidence index, this time from Reuters and the University of Michigan. Earlier in the week the Conference Board Consumer Confidence Index fell to a five-month low on job growth concerns.
In a separate report the Commerce Department released its third and final Q2 GDP estimate, which showed the economy expanded at an annualized rate of 2.5 percent. Meanwhile, the National Association of Realtors reported a drop in pending home sales in August, a sign that higher mortgage rates may have slowed momentum in the housing market.
Market participants eased their concerns about the budget ceiling after House Speaker John Boehner said he doesn’t expect the government to shut down next month. President Barrack Obama is demanding an increase to the $16.7 trillion debt ceiling. Treasury Secretary Jacob Lew warned Congress Wednesday that a failure to increase the debt limit could potentially result in a downgrade of the government’s credit rating.
The Standard & Poor’s 500 advanced 0.35 percent to 1,698.67 after falling through 1,700 Wednesday. The Dow Jones Industrial Average also posted a gain, advancing 55 points to 15,328.30, with 21 of its 30 members ending the day on the plus side. The Dow’s best performers were Nike (NYSE:NKE) , Verizon (NYSE:VM) and Walt Disney (NYSE:DIS) , advancing at least 1.2 percent. Cisco Systems (NASDAQ:CSCO) and Intel Corporation (NASDAQ:INTC) were the day’s biggest losers, falling at least 1.2 percent. The NASDAQ Composite posted a rally of 0.7 percent, closing at 3,787.43 after tech giants Microsoft(NASDAQ:MSFT) and Apple (NASDAQ:AAPL) gained at least 0.8 percent.
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