On Thursday, US markets experienced upward movement thanks to better than expected initial claims data. The jobless claims report for last week showed that initial claims were at their lowest point since the early days of recession. Following these developments, markets rose to a near four -year high last seen before 2008.
The Dow Jones Industrial Average (DJIA) surged 0.39% to close at 12,989. The Standard & Poor (S&P 500) Index rose 0.27% to settle at 1,361.28. The Nasdaq composite Index gained 0.70% to end the day at 2,953.67. The fear gauge CBOE Volatility Index (VIX) ended at 16.80.
Now that an agreement has been concluded on the Greek debt situation, investors are focusing on domestic economic data in the hope of receiving news that will provide further direction to the markets. The impact of positive data on initial claims was limited as it failed to lift the S&P 500 Index beyond the technical barrier of 1,360. The index has failed to break the resistance at that level during several sessions in the past. Many investors fear that the market will soon witness a correction if the S&P 500 Index is unable to break through the resistance level in the near future.
Jobless claims filed for unemployment benefits last week remained unchanged and the four week average is now at its lowest in four years. This data helped the markets to wipe out early losses and soar higher. Investors believe that this is a sign that the jobs market is improving. According to the report: “In the week ending February 18, the advance figure for seasonally adjusted initial claims was 351,000, unchanged from the previous week’s revised figure of 351,000. The 4-week moving average was 359,000, a decrease of 7,000 from the previous week’s revised average of 366,000. The advance seasonally adjusted insured unemployment rate was 2.7 percent for the week ending February 11, unchanged from the prior week’s unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending February 11, was 3,392,000, a decrease of 52,000 from the preceding week’s revised level of 3,444,000. The 4-week moving average was 3,453,250, a decrease of 43,750 from the preceding week’s revised average of 3,497,000.”
Financial stocks led the market backed by positive economic data and a marginal increase in housing market prices. The Financial Select Sector SPDR ETF, the financial stocks tracker for the S&P 500 Index, surged 0.9% while the SPDR S&P Bank ETF gained 11%. Shares of Citigroup (NYSE:C), JP Morgan Chase & Co. (NYSE:JPM) and Goldman Sachs Group (NYSE:GS) were up 1.08%, 1.10% and 1.26% respectively.
The Technology sector experienced good momentum on Thursday with Apple (Nasdaq:AAPL) and MetroPcs Communications Inc (NYSE:PCS) gaining 0.65% and 13.81%. Other stocks such as Leap Wireless (Nasdaq:LEAP), Clearwire Corporation (Nasdaq:CLWR) and Spring Nextel (NYSE:S) rose 11%, 6.84% and 13% respectively. The dampening factor for the tech sector was Hewlett-Packard Co.(NYSE:HPQ) which had fallen 6.53% by the end of day after reporting a decline in sales numbers and a disappointing profit outlook.
