Wall Street Holds to Gains

A drop in weekly jobless claims boosts sentiment on the final trading day of 2008.
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Updated from 11:25 a.m. EST

Stocks in New York continued to track upward into Wednesday afternoon as investors eyed the final trading hours of the 2008 trading year.

The

Dow Jones Industrial Average

was up 114 points at 8741, and the

S&P 500

was gaining 11 points at 898. The

Nasdaq

was adding 24 points at 1568.

The market got an unusual dose of data Wednesday morning that at face value was better than expected. The number of people seeking

unemployment benefits

fell to 492,000 from 586,000 a week prior and well below economists' expectation for 575,000. However, "seasonal factor volatility" played a part according to the Department of Labor.

"Until there's more clarity, I would not yet put jobless claims on a list of figures suggesting the worst has thus far been seen. It is a list that remains nearly empty," writes Tony Crescenzi, chief bond market strategist for Miller Tabak, on his

Real Money blog

.

In other data Wednesday, mortgage application volume was fairly steady over the last week, after a 48% rise the week prior. The purchase index, which includes conventional mortgages and government-insured mortgages, was 320.90 in the latest week, up from 316.50 the previous week.

"Mortgage applications for many weeks had been sliding, reaching their lowest in eight years two weeks ago, reflecting an increase in mortgage rates, falling home prices, poor employment conditions and the realization amongst prospective home buyers that mortgage credit has become more difficult to obtain," writes Crescenzi.

But borrowers are taking advantage of Interest rates that plummeted last month after the

Federal Reserve

said it would buy up to $600 billion in mortgage-backed securities and other debt issued by government-controlled mortgage giants

Fannie Mae

(FNM)

and

Freddie Mac

(FRE)

.

"Today's and recent data suggest there is potential for relief in the housing crisis, and the relief could grow if the Federal Reserve fulfills its threat to expand its initiative to purchase agency and mortgage-backed securities," writes Crescenzi.

Economic news earlier in the week was bad as expected, with terrible retail sales data, the worse yet consumer sentiment numbers,and an 18% drop in the S&P/Case-Shiller home price index.

"Yet the market shrugged off all of the above and rose," writes Vince Farrell, chief investment officer at Soliel Securities Corp. "When markets can do that, it's possible that the bad news has been fully discounted."

Meanwhile, in one of the most disturbing stories of 2008, disgraced investor

Bernard Madoff

is scheduled to submit a list of his personal assets to the

Securities and Exchange Commission

on Wednesday, including property that could be tapped to make restitution to victims of his $50 billion Ponzi scheme. The document, of obvious interest to the victims of the scheme, will not be made public, according to the SEC.

In a sign of the times, Lake Superior State University included "bailout" and the "Wall Street/Main Street" dyad in its list of banished words for 2009.

Fitting in one last

bailout

in 2008, the Treasury Department said Tuesday it will provide $5 billion to

GMAC Financial Services

, GM's auto and mortgage financing arm, in return for preferred shares that pay an 8% dividend and warrants to purchase additional shares.

In corporate news,

Credit Suisse

(CS) - Get Report

said it will pick up a 25% stake in Aberdeen Asset Management in exchange for its traditional fund management business.

Computer maker

Dell

(DELL) - Get Report

said that it will rejigger its executive lineup as part of its global restructuring. The company said Michael Cannon, president of global operations, and Mark Jarvis, chief marketing officer, will leave the company.

Also, the world's third-largest independent chemical company, LyondellBasell Industries, has informed lenders that a Chapter 11 filing might be in its future, according to a report in

The Wall Street Journal

.

In commodities, oil was recently up $1.90 at $40.93 a barrel, while gold added $7.30 to $877.30 an ounce -- both reversing from falling prices earlier in the day.

Longer-dated U.S. Treasury securities were recently falling. The 10-year note was giving up 1 22/32 to yield 2.2%, and the 30-year was down 3 03/32, yielding 2.7%. The dollar was stronger against the euro and the yen, and weaker against the pound.

Overseas, the FTSE in London was edging higher, and the Hong Kong's Hang Seng ended with gains.

Copyright 2008 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed. AP contributed to this report.