Market Recap: Stocks Rally on Lower Jobless Claims
Markets closed up on Wall Street today: Dow +0.52%, S&P +0.83%, Nasdaq +0.83%, Oil +0.73%, Gold -0.45%.
On the commodities front, Oil (NYSE:USO) climbed to $99.39 a barrel. Precious metals were down, with Gold (NYSE:GLD) falling to $1,606.30 an ounce while Silver (NYSE:SLV) fell 0.41% to settle at $29.13.
Today’s markets were up because:
1) Consumer sentiment. Consumer confidence in the U.S. rose more than forecast in December, to a six-month high, as unemployment declined and gasoline prices moved lower. The Thomson Reuters/University of Michigan survey of consumer expectations for six months from now, which more accurately projects the direction of consumer spending, also rose to 63.6 in December, compared to 55.4 last month, marking the fourth straight gain and the biggest point increase in a single month since May.
2) Jobless claims. In the week ended December 17, new claims for jobless benefits dropped by 4,000 to a seasonally-adjusted 364,000 — the lowest since April 2008 — bolstering the view that the economy is gaining momentum after the national unemployment rate declined sharply to 8.6 percent in November. Until last month, the unemployment rate had hovered at or just above 9 percent for many months on end.
3) Financials. Despite a rather thinly traded session, gains were broad-based, with financial stocks leading the way. Citigroup (NYSE:C) and Morgan Stanley (NYSE:MS) each climbed around 6 percent, while Bank of America (NYSE:BAC) and JPMorgan (NYSE:JPM) were both up more than 3 percent, Goldman Sachs (NYSE:GS) climbed 2.6 percent, and Wells Fargo (NYSE:WFC) climbed 1.3 percent.