NEW YORK (AP) - Investors are poised to extend a rally Thursday after a report showed new unemployment claims dropped last week and a day after the Federal Reserve’s said it would pump more than $1 trillion into the economy.
Stock futures were moving higher throughout the morning and maintained their gains after the unemployment report was released.
The Labor Department said the number of initial requests for unemployment insurance dropped to a seasonally adjusted 646,000 from the previous week’s revised figure of 658,000, better than economists’ expectations.
The news was somewhat mixed though as the number of people filing for more than a week set a new record for the eighth straight week, jumping 185,000 to a seasonally adjusted 5.47 million.
Dow Jones industrial average futures rose 30, or 0.40 percent, to 7,528. Standard & Poor’s 500 index futures rose 3.60, or 0.45 percent, to 795.20, while Nasdaq 100 index futures rose 3.25, or 0.27 percent, to 1,216.00.
Markets are coming off their sixth gain in the past seven trading sessions, buoyed by a string of upbeat news. The latest was the Fed’s announcement it would pump more than $1 trillion into the economy to help revive the battered housing market, which has been a primary reason for the ongoing economic turmoil. The plan includes buying up to $300 billion of long-term government bonds during the next six months, which sent the bond market surging Wednesday as well. The Fed’s moves are aimed at driving down borrowing costs for everything from mortgages to credit cards.
It was the second straight day signs of potential improvement for the housing market helped bolster the markets. On Tuesday, an unexpected increase in housing starts and building applications sent investors into the market. A recovery of the housing market is widely considered a key to helping ending the ongoing recession.
The recently rally was sparked by some of the hardest hit banks in the country announcing they have seen business improve during the first two months of the year, including Citigroup Inc. and Bank of America Corp.
Meanwhile, bond prices mostly fell, a day after steep gains following the Fed news. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 2.53 percent from 2.50 percent late Wednesday. The yield on the three-month T-bill, considered one of the safest investments, was flat at 0.20 percent.
The dollar was mixed against other major currencies, while gold prices rose.
Oil prices rose $2.96 to $51.10 per barrel in premarket electronic trading on the New York Mercantile Exchange.
Overseas, Japan’s Nikkei stock average fell 0.3 percent. In afternoon trading, Britain’s FTSE 100 was rose 1.7 percent, Germany’s DAX index gained 2.3 percent, and France’s CAC-40 rose 1.4 percent.
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