Markets Fall Despite Positive News on Jobless Claims and Consumer Confidence

published Despite several pieces of good economic news, equity markets in the United States suffered their second week of losses as the continued uncertainty in Europe and an unexpected $2 billion trading loss by the investment bank JP Morgan led investors to take some profits off the table. The job market showed signs of life this week when the Department of Labor announced that initial jobless claims1came in at just 370,000. Although this number was unchanged from last week's report, it did remain under the critical 400,000 level, which leads us to believe that employment growth may improve in the months ahead. In addition to the promising jobs number, falling oil prices contributed to rising consumer confidence. The Thomson Reuters/University of Michigan consumer sentiment index2 reached 77.8, which was the highest reported number in nearly four and a half years. We believe this report provides evidence that consumer spending may rebound, a necessary precondition for stronger economic growth. Investors who are looking for further evidence of strengthening consumer spending will await the latest report on retail sales for April, which will be released on Tuesday. Furthermore, several retailing giants, including Wal-Mart, Target and Home Depot, will be reporting earnings during the week, giving investors a good look at the overall health of the retail sector. However, all eyes will ultimately be on Facebook's initial public offering, which is expected to be one of the largest public stock offerings in history. Although the final offering price will not be set until Thursday evening, the company is expected to start trading on Friday with a valuation that could be as high as $100 billion. 1. A weekly number put out by the Department of Labor that reports the number of newly unemployed individuals that have filed for jobless benefits. This number is used by economists to evaluate the strength of the labor market. 2. A monthly survey that attempts to measure the level of optimism in the economy. It is generally considered to be a leading indicator for economic growth because consumers who are confident about future prospects are more likely to spend money on goods and services.

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Markets Give Back Recent Gains After Jobs Report

The S&P 500 gave back some of its impressive year-to-date gains last week after a weaker-than-expected jobs report stoked fears among investors that the economic recovery in the United States is still not quite as strong as it could be. The Department of Labor announced on Friday that 115,000 jobs were created in April. Although this number was below expectations, the unemployment rate did drop to just 8.1 percent. In addition, the employment numbers for both February and March were revised upward, which gave some solace to investors who were expecting a better jobs report this month.

Markets Fall Despite Positive News on Jobless Claims and Consumer Confidence

Despite several pieces of good economic news, equity markets in the United States suffered their second week of losses as the continued uncertainty in Europe and an unexpected $2 billion trading loss by the investment bank JP Morgan led investors to take some profits off the table. The job market showed signs of life this week when the Department of Labor announced that initial jobless claims1came in at just 370,000. Although this number was unchanged from last week's report, it did remain under the critical 400,000 level, which leads us to believe that employment growth may improve in the months ahead.

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