Exchange traded funds (ETFs) are mixed Thursday after the government reported jobless claims totaled 388,000 last week, leaving investors on the fence ahead of Friday’s payrolls data.

  • U.S. initial jobless claims fell last week for the third straight week, the government said Thursday in a report offering fresh evidence the ailing labor market is recovering. The number of first-time claims for unemployment insurance payments dropped to a seasonally adjusted 388,000 in the week ending March 26, from an upwardly revised 394,000 in the prior week, the Labor Department reported. It was the third consecutive week of declines in the weekly number, extending a downtrend in claims seen since mid-August. The four-week moving average, which helps to smooth week-to-week volatility, fell to 385,250 claims, a drop of 1,500 from the prior week. The SPDR S&P 500 ETF (NYSEArca: SPY) is flat early Thursday.
  • The Chicago PMI decelerated slightly to a reading of 70.6% in March from 71.2% in February, a level still well above the 50% no-change line. Economists polled by MarketWatch had forecast a reading of 68.9%. The prices paid component climbed to 83.4% from 81.2%, while new orders edged slightly lower to 74.5% from 75.9%. The Chicago PMI takes on added importance as the last major regional purchasing managers index released before the national Institute for Supply Management’s manufacturing index; though economists say the Philadelphia Fed index typically tracks more closely with the national gauge than the Chicago reading. The Industrial Select Sector SPDR ETF (NYSEArca: XLI) is mixed on Thursday.
  • European markets fell on Thursday, as concerns over the results of Irish banks’ stress tests prompted investors to sell financial shares across the Continent. Data also showed a rise in euro-zone inflation, adding to the negative sentiment. “Investors are worried about the results of today’s stress tests,” said Christian Stocker, equity strategist at UniCredit. “We are quite pessimistic concerning Ireland’s banks and probably also the Portuguese and Spanish banking system.” Ireland will release later on Thursday afternoon the results of stress tests performed on Irish banks, which are expected to need billions of euros more in financing. Shares across the Irish bank sector were suspended ahead of the announcement. The BLDRs Europe 100 ADR Index (NasdaqGM: ADRU) is flat in early trading.
  • Oil prices climbed back above $105 a barrel Thursday after control of a key oil port swung back to forces loyal to Libyan leader Moammar Gadhafi, dimming hopes of a quick rebel victory and a restart of crude exports. On Wednesday, Gadhafi forces pushed rebels out of Ras Lanouf, an important oil terminal that has switched between the two sides several times since the uprising began last month. The latest rebel setback has raised speculation that coalition powers, which have bombed government forces for two weeks, may send ground troops to protect the rebellion or overthrow Gadhafi. “The market is reacting to news from Libya that rebels have lost some ground again,” said analysts at Commerzbank in Frankfurt. “An end to the fighting in Libya soon is thus not in sight and the resumption of oil shipments has moved into the far distance.” The United States Oil Fund (NYSEArca: USO) is up 2% so far today.

Gregory A. Clay contributed to this article

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