Exchange traded funds (ETFs) are posting gains on Thursday after economic data showed a decline in jobless claims last week and an unexpected 0.9% drop in durable-goods orders in February. Also drawing investors’ attention were oil, the price of which topped $106 a barrel and the European Union’s planned meeting in Brussels as Portugal slid into a crisis.
- New claims for U.S. unemployment benefits fell again last week, continuing a downward trend that has renewed hopes the troubled labor market is on the mend. New jobless claims fell to 382,000 in the week ending March 19, the Labor Department said. That was a modest drop from the week before, but was still below the 400,000 level which economists say points to lower unemployment. The number of claims for the previous week was revised up slightly to 387,000. Claims have been on a downward trend since mid-August last year, as the unemployment rate has steadily fallen. The SPDR Dow Jones Industrial Average ETF (NYSEArca: DIA) is up 0.2% so far today.
- New orders for long-lasting manufactured goods fell in February, hinting at some unexpected softness in manufacturing activity and business investment plans. The Commerce Department said durable goods orders fell 0.9% after a 3.6% increase in January. Economists polled by Reuters had expected a 1.1% increase. Excluding transportation, orders fell 0.6% after dropping 3.0% in January. “Durables were extremely disappointing … it is not a very good sign for what is happening in the first quarter,” said Rudy Narvas, a senior economist at Societe Generale in New York. The Industrial Select Sector SPDR ETF (NYSEArca: XLI) is slightly higher early Thursday.
- Portugal’s prime minister resigned Wednesday after Parliament rejected his plan to impose further austerity on the debt-laden country, leaving a power vacuum in Lisbon and casting doubt on the European Union’s efforts to control a persistent sovereign-debt crisis. Saying he couldn’t govern without support, Prime Minister Jose Socrates handed in his resignation Wednesday evening, shortly after the vote in Parliament. The vote and government collapse is expected to increase pressure on Portugal to seek an EU bailout worth tens of billions of euros to help Lisbon meet debt repayment obligations. Greece and Ireland have already been forced to take bailouts to help them contain debt crises spawned in the global recession. The SPDR Euro Stoxx 50 ETF (NYSEArca: FEZ) gained approximately 1% in early trading.
- Oil prices rose above $106 a barrel Thursday as a wave of violent protests and uprisings rocked the oil-rich Arab world and U.S. gasoline inventories fell sharply. Coalition missiles strikes have pounded forces loyal to Libyan leader Moammar Gadhafi for five days, giving rebels breathing room to regroup. With Gadhafi refusing to step down and President Barrack Obama ruling out a land invasion, the conflict could face a stalemate that keeps most of the OPEC nation’s 1.6 million barrels a day of crude production shut down longer than investors had initially anticipated. Crude prices were also lifted by signs U.S. consumers aren’t letting rising fuel costs crimp demand. The Energy Department said gasoline inventories fell 5.3 million barrels last week, and gasoline stocks are down 8.9% during the last five weeks. The SPDR S&P Oil & Gas Exploration & Production ETF (NYSEArca: XOP) is flat on Thursday.
Gregory A. Clay contributed to this article
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