The Dow Jones Industrial Average index (DJI) jumped 87 points to 11,910 in early Thursday trading on a report by the U.S. Department of Labor that new unemployment claims came in at 366,000 this week – the lowest weekly number since 2008. The NASDAQ Composite was unchanged and the S&P 500 had gained 7 points, or 0.6%, to 1,219 by 11:30am Eastern Time Thursday.
Initial unemployment claims for the week ending December 10 came in at 366,000 according to the USDOL, a decrease of 19,000 from last week’s numbers. The news sparked optimism in U.S. equities as investors considered the possibility that uncertain economic conditions in the nation could be improving. At this time last year, seasonally adjusted new unemployment claims were being filed at a pace of 427,000 per week.
Ian Shepherdson, chief U.S. economist at High Frequency Economics, told CNNMoney.com today, “This is unexpectedly great news. If claims can remain at this level, payroll growth will strengthen markedly within a month or so.” Wholesale prices for the month of November were reported at a slight increase month-over-month due to rising food costs, although producer prices remained relatively unchanged. The United States trade deficit also recovered slightly in the third quarter as a result of a record number of exports and foreign investors soaking up U.S. sovereign debt through Treasury bond purchases.
Stock Market Midday Update
Several stocks had seen an upward push on their market value by midday Thursday, led by Novellus Systems, Inc. (NASDAQ: NVLS), which rose 21.7% to $42.25 per share after Lam Research Corp. released a statement late Wednesday saying it would buyout the chip maker for $3.3 billion. On the other side of the spectrum, shares for First Solar, Inc. (NASDAQ: FSLR) retreated another 7 percent in early Thursday trading to $31.10 as the solar panel installation firm searches for unsubsidized markets where it can run a more profitable business.
FedEx Corporation (NYSE: FDX) shares also rose in early morning trading on Thursday – up 4.7% to $81.02 on a positive earnings report that showed a 76% increase in profit for its fiscal second quarter.
Crude oil futures rose $0.60 per barrel to $95.55 by midday Thursday after plunging nearly 5 percent a day before on news out of OPEC that it would raise its daily production cap to 30 million barrels. Gold prices had increased $1.60 per ounce to $1,588.50 by 11:30am Eastern Time after the precious metal experienced its largest YTD downswing on Wednesday.
U.S. Treasury yields also retreated slightly to 1.94% from Wednesday’s close of 1.90 percent on 10-year debt. Foreign investment has flooded into the United States in recent months as experts fear the Eurozone sovereign debt crisis will spread throughout the region and result in significant government defaults. Although struggling European financial institutions will be able to borrow funds at very low interest rates through 2013, the same cannot be said for nations such as Spain, Italy, Ireland and others, who may need to implement strict austerity measures in order to convince the ECB and other central banks to extend bailout loans.
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Online games developer Zynga, Inc. is seeking to list its shares on the NASDAQ this week by going public and raising an anticipated multi-billion cash influx in its Initial Public Offering. Headed by CEO Mark Pincus, the company is responsible for developing popular real-time games such as FarmVille and Mafia Wars II. The stock will begin trading on Friday under the ticker (NASDAQ: ZNGA).
That wraps up today’s midday stock market report. Be sure to visit IRA.com News after today’s trading session ends to read our daily stock market recap.