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Stocks Rise on Pending Home Sales and Jobless Claims

Strategic Insights

— 1 min read

Stocks rose early Thursday after a Realtors' group reported that pending home sales rose more than expected in November, and jobless claims remained below 400,000, giving investors hope that the labor market will strengthen in the new year. The Dow Jones industrial average gained 77 points, or 0.6%, in early trading, while the S&P 500 and Nasdaq also rose. Financial stocks, such as JPMorgan Chase, Goldman Sachs, and Bank of America, led the gains.

Key Takeaways:

  • Pending home sales, as measured by the National Association of Realtors, rose 4% to a seasonally adjusted annual rate of 4.42 million in November, exceeding economists' expectations of a 0.6% increase.
  • Jobless claims rose 15,000 to 381,000 in the latest week, but remained below 400,000, supporting hopes for a strengthening labor market in the new year.
  • Financial stocks, such as JPMorgan Chase, Goldman Sachs, and Bank of America, led the gains, rising on the back of low volume and year-end portfolio rebalancing.
  • Traders and analysts noted that the moves are coming from year-end portfolio rebalancing rather than convictions over the trajectory of the market or particular stocks.
  • Stocks closed down more than 1% on Wednesday, pushing the S&P back into negative territory for the year, with the Nasdaq down roughly 2% for 2011.
  • Despite Wednesday's sell-off, the Dow remains up 5% for 2011.

Statistics:

  • Dow Jones industrial average: up 77 points, or 0.6%, to 12,419
  • S&P 500: added 7 points, or 0.6%, to 1,265
  • Nasdaq: rose 7 points, or 0.3%, to 2,651
  • Jobless claims: rose 15,000 to 381,000
  • Pending home sales: rose 4% to a seasonally adjusted annual rate of 4.42 million
  • Oil for February delivery: rose 43 cents to $99.79 a barrel
  • Gold futures for February delivery: fell $25.90 to $1,538.20 an ounce

Sources:

  • CNNMoney
  • National Association of Realtors
  • U.S. Labor Department
  • Briefing.com
  • Goldman Sachs
  • Alibaba Group
  • BP
  • European stocks: FTSE 100, DAX, CAC 40
  • Asian markets: Shanghai Composite, Hang Seng, Nikkei
  • Currencies: dollar, euro, British pound, Japanese yen
  • Commodities: oil, gold, U.S. Treasury bonds

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