Stocks climbed Wednesday following a drop in weekly unemployment claims to the lowest level of the year and a rise in new home sales.
NEW YORK (AP) — Stocks climbed Wednesday following a drop in weekly unemployment claims to the lowest level of the year and a rise in new home sales.
The market’s gains were modest on light trading volume ahead of the Thanksgiving holiday.
The government said new claims for unemployment insurance fell by 35,000 last week to 466,000. That’s the fewest claims since September last year, and better than the 500,000 that economists had expected.
The drop in claims suggests the job market is healing, but concern remains that the improvement will be temporary as the weak economy continues to push unemployment higher. The jobless rate hit 10.2 percent in October and many analysts believe it will keep rising before starting to improve next summer.
In other economic reports, new home sales rose 6.2 percent to an annual rate of 430,000. That’s above what economists surveyed by Thomson Reuters had expected.
Separately, the government also reported consumer spending rose a brisk 0.7 percent last month, following a 0.6 percent drop in September. It was the best showing since August, when the government’s now-defunct Cash for Clunkers programs enticed people to buy cars.
Not all the day’s news was upbeat. Orders for expensive manufactured goods dropped 0.6 percent last month, the first drop since August. Economists had expected orders would grow.
Doug Roberts, chief investment strategist at Channel Capital Research in Shrewsbury, N.J., said investors are still worried about the sustainability of a recovery but are afraid of missing more of the market’s eight-month rally.
“People may not believe in this market but they’re reluctantly being pulled into it with each of these reports,” he said.
According to preliminary calculations, the Dow Jones industrial average rose 30.69, or 0.3 percent, to 10,464.40.
The broader Standard & Poor’s 500 index rose 4.98, or 0.5 percent, to 1,110.63, and the Nasdaq composite index rose 6.87, or 0.3 percent, to 2,176.05.