- The Washington Times - Wednesday, December 31, 2008

UPDATED:

Wall Street ended one of its worst years in history Wednesday with a rally spurred by news of lower-than-expected first-time jobless claims.

At the close, the Dow Jones Industrial Average leaped 108 points, or 1.25 percent, to 8776.39. The tech-laden Nasdaq rose 26.33, or 1.70 percent, to 1577.03. The broader Standard & Poor’s 500 increased 12.61, or 1.42 percent, to 903.25.

The markets also possibly looked optimistically to the year ahead as mortgage giant Freddie Mac reported that interest on 30-year fixed-rate mortgages dipped to an average of 5.10 percent for the week ended Wednesday, down from 5.14 percent last week — the ninth consecutive drop and the lowest such rate since 1971.

The lower the mortgage, the more people will be willing to buy a house, reducing the countrys overstocked housing inventory, and the more current homeowners will want to refinance their current mortgages.

The fourth quarter of this year marked the worst in losses for the Dow and the S&P 500 since 1987 and the worst for the Nasdaq since 2001, CNBC said.

The Labor Department reported that the number of people seeking jobless benefits for the first time dropped by a seasonally adjusted 94,000 to 492,000 for the week ended Saturday, less than the 550,000 that economists had expected. Claims numbered 586,000 the previous week.

The decline marked the lowest number for initial claims since the week ended Nov. 1 and the biggest drop since 1992, at the end of a recession.

But the falloff did not mean that labor conditions have improved. The number of dismissed workers who continue to draw unemployment benefits rose by 140,000 to 4.5 million for the week ended Dec. 20 — the most since December 1982, during another recession.

Wednesday closed out one of the most punishing years for U.S. stock markets. The Dow plummeted 35 percent in its worst year since 1931, at the onset of the Great Depression. The Nasdaq lost 41.5 percent during the year, and the benchmark S&P 500 gave up 39.3 percent.

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