Stock exchange traded funds (ETFs) finished higher on Tuesday after encouraging earnings news and unexpected strength in housing, but weakness in technology and financial shares tempered gains.
The unemployment rate fell in two-thirds of the nation’s states last month, the latest evidence that the strengthening economy is encouraging many employers to boost hiring. The Labor Department said Tuesday that the unemployment rate dropped in 34 states in March. That’s the largest number of states to record a decline since June. The rate rose in seven states and was unchanged in nine and Washington, D.C. Employers hired more workers in 38 states. A government survey of employer payrolls found only 12 states plus Washington, D.C. lost jobs last month, the fewest since October. Nationally, the unemployment rate fell in March to a two-year low of 8.8 percent, and private employers added more than 200,000 jobs for the second consecutive month. That’s the largest two-month hiring total in four years. The Consumer Staples Select Sector ETF (NYSEArca: XLP) closed slightly higher on Tuesday.
Millions of seniors in popular private insurance plans offered through Medicare will be getting a reprieve from some of the most controversial cuts in President Barack Obama’s health care law. In a policy shift critics see as political, the Health and Human Services department has decided to award quality bonuses to hundreds of Medicare Advantage plans rated merely average. The $6.7 billion infusion could head off service cuts that would have been a headache for Obama and Democrats in next year’s elections for the White House and Congress. More than half the roughly 11 million Medicare Advantage enrollees are in plans rated average. The health care law cut $145 billion over ten years from Medicare Advantage, partly to correct a widely acknowledged problem with overpayments to the plans and higher out-of-pocket costs, triggering an exodus back to traditional Medicare. The Pharmaceutical HOLDRs ETF (AMEX: PPH) gained over 1% today.
Lenders would be required to make sure prospective borrowers have the ability to repay their mortgages before giving them a loan, under a proposal released by the Federal Reserve on Tuesday. The rule, which is required by the Dodd-Frank financial reform law, is intended to tighten lending standards and combat home lending abuses that contributed to the 2007-2009 financial crisis. The rule would establish minimum underwriting standards for most mortgages and lenders could be sued by the borrower if they do not take the proper steps to check a borrower’s ability to repay the loan. The law does provide protections from this type of liability if a loan meets the specific standards that are part of a “qualified mortgage.” The Vanguard REIT Index ETF (NYSEArca: VNQ) closed almost 1% higher on Tuesday.
Gregory A. Clay contributed to this article.
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