- The Washington Times - Thursday, May 28, 2009

UPDATED:

Wall Street had a mixed response midday Thursday to upbeat economic reports and to General Motors Corp. reaching a deal with bondholders.

The Dow Jones Industrial Average was up 5.18 points, to 8,305.20. The broader Standard & Poor’s 500-stocks Index was at 894.04, up 0.98 points, and the tech-heavy NASDAQ was down 0.96 points, to 1,730.12.

General Motors’ revised deal offers bondholders 10 percent of company stock with the opportunity to buy as much as 15 percent if they support the automaker selling assets to a new company under bankruptcy protection.

GM stock was up 3 cents, to $1.18 a share, in midday trading.

Three of the four key economic reports came from the federal government.

The Labor Department reported the number of first-time claims for unemployment insurance decreased last week by 13,000. However, the number of continuing claims increased to 6.79 million for the week ending May 16, a record high for 17 straight weeks and 110,000 more than the preceding week’s revised number of 6.68 million.

The Commerce Department reported the sale of durable goods in April increased $3 billion, or 1.9 percent, to $161.5 billion. The figure is an indicator of whether U.S. households are again buying such long-lasting and more expensive products as appliances and automobiles.

The Census Bureau reported the sale of new, single-family homes increased in April by 3 percent compared to the previous month. The number of homes sold was 352,000, which was 1,000 more than in March. The median sale price was $209,700, roughly 15 percent less than in April 2008 but up about 3 percent from March. The average sale price was $254,000. The agency also said roughly 297,000 homes were for sale last month across the country, compared to 310,000 in March.

The report was issued shortly before the Mortgage Bankers Association reported a record 12 percent of mortgages are delinquent or in foreclosure. Foreclosures on prime, fixed-rate loans doubled in the past year and is now the largest percentage of new foreclosures, the group said.

U.S. markets lost Wednesday amid concerns about rising yields on government debt, which could increase interest rates on mortgages and other loans and slow the recovery. However, the yield on the 10-year Treasury note has dropped to 3.70 percent, from 3.75 percent late Wednesday — a six-month high. The Dow lost 2.1 percent. The S&P lost 1.9 percent, and the NASDAQ lost 1.1 percent.

The markets are up roughly 25 percent since hitting a 12-year low in early March, with analysts saying major U.S. banks and most other sectors of the economy appear to be stabilizing.

Also Thursday, the price of crude oil reached a six-month high of more than $64 a barrel, which combined with the improved unemployment number and the increase in the sale of durable goods indicates the economy is growing and needs fuel.

Light, sweet crude was up $1.10, to $64.55 a barrel, on the New York Mercantile Exchange.

Overseas, Japan’s Nikkei stock average rose 0.13 percent. In afternoon trading, Britain’s FTSE 100 fell 0.65 percent, Germany’s DAX index fell 1.36 percent, and France’s CAC-40 fell 0.95 percent.

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