- The Washington Times - Saturday, June 6, 2009

Wall Street closed Friday with mixed results following a report that the unemployment rate increased in May but the economy shed fewer jobs than expected.

The Dow Jones Industrial Average closed at 8,763.13, up 12.89 points in light trading. The broader Standard & Poor’s 500 Index closed at 940.09, down 2.37 points, and the tech-heavy Nasdaq closed at 1,849.42, down 0.60 points.

The Labor Department reported the unemployment rate increased to 9.4 percent in May, up from 8.9 in April and the highest in 26 years. However, the 345,000 layoffs last month were the fewest since September and less than economists expected. About 14.5 million people were unemployed in May.

The report is a key economic indicator because it helps project trends in consumer spending, retail sales and other sectors of the economy.

The government reported Thursday that initial unemployment claims last week decreased and continuing claims dropped for the first time in 20 weeks.

“But let’s keep the numbers in perspective,” said Brian Lipps, a Charles Schwab & Co. vice president. “They are lagging indicators. Job numbers are at their worst seven months after the recession ends.”

Another economic report Friday showed borrowing by consumers fell by $15.7 billion in April as American households continued to trim spending and put away their credit cards amid the severe recession.

The Federal Reserve said Friday the April decline was the second largest ever in dollar terms following March’s drop of $16.6 billion. March’s decline originally was reported as $11.1 billion, which had been the most on record dating to 1943.

The April decline was more than double the $6 billion drop that economists had expected. Analysts believe consumers will remain cautious as long as the unemployment rate keeps rising, which it did again in May.

On Wall Street, shares of Apple Inc. rose following news that co-founder and Chief Executive Officer Steve Jobs is returning to work after taking medical leave in January. Apple shares closed at $144.67, up 93 cents.

U.S. stocks have rallied roughly 30 percent since hitting a 12-year low in early March, as banks stabilized and first-quarter earnings reports exceeded analysts’ modest expectations.

But stocks remain more than 30 percent below their 2007 highs, and analysts are now looking for a clearer sign the 18-month-long recession is ending amid new concerns about the global economy, rising interest rates, the value of the dollar and the increasing price of oil and other commodities.

Oil prices have increased sharply over the past three months, but the price of light crude Friday slipped 37 cents to close at $68.44 a barrel on the New York Mercantile Exchange.

Bonds prices fell Friday. The yield on the benchmark 10-year Treasury note, which moves opposite its price, jumped to 3.84 percent from 3.71 percent late Thursday. The yield is tied to rates for mortgages and other consumer loans.

Mr. Lipps said he is focused on bond prices and analyzing whether their movements show signs of a sustainable recovery or “threaten to choke off borrowing.”

The dollar was lower against the euro and the British pound.

Overseas, Japan’s Nikkei stock average gained 1.02 percent. Britain’s FTSE 100 gained 1.18 percent, Germany’s DAX index gained 0.24 percent, and France’s CAC-40 gained 0.82 percent.

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