New York: Wall Street rose modestly in light holiday trading on Wednesday after the government released downbeat, but unsurprising, readings on rising US joblessness and declining consumer spending.
The swelling rate of unemployment has been particularly worrisome to investors. The more people lose their jobs, or fear they will lose their jobs, the more they close their wallets. And consumer spending accounts for more than two-thirds of U.S. economic activity.
But Wall Street’s reaction to Wednesday’s economic data was a shrug. Investors have largely been factoring in bad numbers for the fourth quarter as Americans adjusted to the slumping economy, and as banks and automakers scrambled for funding from the US government to stay afloat.
The Labor Department said initial applications for unemployment benefits rose more than anticipated to a seasonally adjusted 586,000 last week. That was the highest level since November 1982, though the work force has grown by about half since then.
Other reports were gloomy, but less grim than anticipated. The Commerce Department said consumer spending dropped 0.6% in November, the fifth straight monthly drop and durable goods orders fell 1% in November.
Wednesday’s stock moves were considered largely inconsequential in the grand scheme of things. Trading volumes were extremely low ahead of Christmas, and the markets closed early Wednesday at 1pm. And with only four trading days left in 2008, most buying and selling appeared to be investors trying to dress up their portfolios after a year of unprecedented market turmoil.
The Dow Jones industrial average rose 48.99, or 0.58%, to 8,468.48, after falling for five straight sessions. The blue-chip index is well off its November lows, but is still down for the typically strong month of December.
Broader stock indicators also gained. The Standard & Poor’s 500 index futures rose 4.99, or 0.58%, to 868.15, and the Nasdaq composite index rose 3.36, or 0.22 %, to 1,524.90.
Advancing issues outnumbered decliners by about 3 to 2 on the New York Stock Exchange, where volume amounted to 403.7 million shares.
Bond prices, like stocks, were little changed. The yield on the benchmark 10-year Treasury note rose modestly to 2.19% from 2.18% late on Tuesday.
Light, sweet crude for February delivery fell $3.63 to settle at $35.35 a barrel on the New York Mercantiles Exchange. The Nymex, like the stock and bond markets, will be closed on Thursday and re-open on Friday.