Housing, jobless give reason to pause
Bareksa • 20 Dec 2013
Housing, jobless give reason to pause (Reuters/Conway G. Gittens)
Dow creeps up to another record but stocks were mostly lower on falling home sales, rising jobless claims
Reuters - Wall Street gets a reality check one day after the Federal Reserve says the economy is strong enough to make it with $10 billion less help.
The Dow inched up to another record close but the rest of the market drifted slightly lower.
A surprise spike in first-time jobless claims to the highest level since March is a reminder the economy is recovering but not roaring.
Also, sales of previously owned home tumbled in November; hitting the lowest point of the year. Sales are down three months in a row as a rise in interest rates and higher selling prices push some buyers out of the market.
The data, actually, reflect the Fed's thinking when it cut or tapered its bond buying program on Wednesday.
Max Wolff is chief economist at ZT Wealth.
SOUNDBITE: MAX WOLFF, CHIEF ECONOMIST, ZT WEALTH (ENGLISH) SAYING:
"I think the taper means that Federal Reserve sees the U.S. economy as continuing an underwhelming partial recovery that requires less help - good news - but still requires a lot of help - less good news - and so it is a commitment to a very long term maintenance of the stasis of the present situation."
On the corporate front: forget about the Grinch, for millions of Target customers hackers may steal Christmas. The third largest U.S. retailer says vital credit and debit card information for some 40 million accounts were stolen between the day before Thanksgiving to December 15. Government authorities are looking into the situation. Investors worried about what this will mean for an already tough holiday shopping season sold the stock down by more than two percent.
Darden is moving ahead with plans to either sell or spin-off Red Lobster. The casual dining conglomerate is under pressure by a shareholder to get rid of the underperforming asset. But the plan was not enough to undo a profit warning - resulting in a 3.6 percent drop in the stock.
Revenues at Nike were up but not as much as expected.
Numbers at cruise operator Carnival coming in ahead of analysts' forecasts. Lower prices are helping to lure customers back after a number of disasters earlier this year.
European markets saw their biggest upswing in the three months encouraged by the Fed's confidence in the world's biggest economy.