Mid-Day Recap: Stock Shorts Covered After Mixed Data
Markets shrugged off a weak labor report Thursday morning and opened flat, partly due to optimism following a hefty gain in Asian markets earlier in the day. Half an hour into the session equities then turned higher as two reports gave reason to believe the growth had resumed in the third quarter.
As of 12:30 the S&P 500 was leading the major indexes with a 0.75% gain to 1,004. The Nasdaq has climbed 0.60% to 1,981, while the Dow was trading 0.36% higher at 9,312.
Mortgage News Daily Editor and Analyst Adam Quinones says, “Today's equity rally is a function of short covering in an illiquid summer trading environment. Price movements are magnified by the lack of liquidity”
Well before the open, China’s Shanghai index saw its largest one-day in five months as it moved up 4.52%, setting the state for Hong Kong’s Hang Seng index to close 1.9% higher. In Europe, the FTSE 100 closed 1.57% higher, and Germany’s Dax improved 1.3%.
US data this morning was mixed, but consistent with the theme that specific sectors in the economy are stabilizing while the labor sector continues to decline.
First-time claims for jobless benefits increased by 15k last week to 576,000, and the prior week’s figures were revised up by a few thousand to 561,000. Any number higher than 360k indicates the labor market is bleeding, so the figures suggest that companies continue slash payrolls rapidly to cut costs.
The number of people continuing to receive jobless benefits increased by 2k to 6.241 million for the week ending August 8. The record high of 6.904 million was seen in late June.
“The painful job losses continue, but â€
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