Bonds sank today following recent gains as profit-taking accelerated in thin trading volumes. The stock indices made modest headway, extending yesterday's rally. In late trading, the 10-Year Treasury Note was down by 12/32, raising its yield to 5.05%; the Dow was up by 41.87 points to 13,577.30; and the Nasdaq was up by 12.65 points to 2,644.95.
Helping send the bond market down was this morning's release of the factory orders. While the value of orders retreated in May, the decline was much lighter than analysts had forecast. The orders data helped stocks. Merger and acquisition news released in the last two days also provided support for stocks. Such aggressive actions -- aside from the effects they have on the particular companies involved -- brighten trader sentiment in their implication that deep-pocket concerns are comfortable with the economic outlook.
The gains in the stock market came despite another increase in oil futures. A barrel of light, sweet crude for next month delivery rose by $0.32 on the New York Mercantile Exchange to settle at $71.41, a new ten-month closing high for a front-month contract. Yet, by the end of stock trading, the Dow had gained 0.31% for the day; the S&P 500, 0.36%; and the Nasdaq, 0.48%. The Nasdaq's gain pushed the index to its highest closing level since February 6, 2001.
Of course, the markets will be closed tomorrow in observance of Independence Day. On Thursday, the latest jobless claims report might get added attention since it heralds the approach of Friday's monthly employment report. In last Thursday's report, the Labor Department said the seasonally adjusted level of initial claims for state unemployment benefits fell by 13,000 the week before to 313,000, essentially reversing an increase of 12,000 in the week ending June 16.
The four-week moving average, which smoothes out some of the short-term volatility, was little changed, rising by 1,000 to 316,000. Despite numerous large swings, the underlying trend has been steady this year with an average weekly claims level of 318,760. Levels below 400,000 suggest that hiring is outpacing layoffs, creating expanding payrolls.
The report said that the level of continuing claims for the week ending June 16 (continuing claims must be at least a week old) fell by 27,000 to 2.490 million. The four-week average rose by 6,750 to 2,505,250. The average weekly level of continuing claims for the year to date is 2,514,708. While this is up from last year's average of 2,458,519, the trend has been relatively stable in the last three months.
Also on Thursday is the ISM's index data on the non-manufacturing, or services, sector of the economy. In May, the index came in at 59.7, up from 56.0 in April and exceeding forecasts for a reading of 55.0%. Like the manufacturing index, readings over 50.0 represent expansions. May's was a fiftieth consecutive growth indicator and the strongest in thirteen months. The data series shows that the sector rebounded in April and May following a four-year low index reading in March of 52.4.
Because the last reading was stronger than expected, forecasters are looking for a modestly weaker reading for June of 58.0. This would still be the second highest index since January. However, the services index does not have the same clout as the manufacturing index because it is relatively young (1997 vs. 1948) and the sector is so broad that varying sub-categories tend to cancel each other out.
Helping send the bond market down was this morning's release of the factory orders. While the value of orders retreated in May, the decline was much lighter than analysts had forecast. The orders data helped stocks. Merger and acquisition news released in the last two days also provided support for stocks. Such aggressive actions -- aside from the effects they have on the particular companies involved -- brighten trader sentiment in their implication that deep-pocket concerns are comfortable with the economic outlook.
The gains in the stock market came despite another increase in oil futures. A barrel of light, sweet crude for next month delivery rose by $0.32 on the New York Mercantile Exchange to settle at $71.41, a new ten-month closing high for a front-month contract. Yet, by the end of stock trading, the Dow had gained 0.31% for the day; the S&P 500, 0.36%; and the Nasdaq, 0.48%. The Nasdaq's gain pushed the index to its highest closing level since February 6, 2001.
Of course, the markets will be closed tomorrow in observance of Independence Day. On Thursday, the latest jobless claims report might get added attention since it heralds the approach of Friday's monthly employment report. In last Thursday's report, the Labor Department said the seasonally adjusted level of initial claims for state unemployment benefits fell by 13,000 the week before to 313,000, essentially reversing an increase of 12,000 in the week ending June 16.
The four-week moving average, which smoothes out some of the short-term volatility, was little changed, rising by 1,000 to 316,000. Despite numerous large swings, the underlying trend has been steady this year with an average weekly claims level of 318,760. Levels below 400,000 suggest that hiring is outpacing layoffs, creating expanding payrolls.
The report said that the level of continuing claims for the week ending June 16 (continuing claims must be at least a week old) fell by 27,000 to 2.490 million. The four-week average rose by 6,750 to 2,505,250. The average weekly level of continuing claims for the year to date is 2,514,708. While this is up from last year's average of 2,458,519, the trend has been relatively stable in the last three months.
Also on Thursday is the ISM's index data on the non-manufacturing, or services, sector of the economy. In May, the index came in at 59.7, up from 56.0 in April and exceeding forecasts for a reading of 55.0%. Like the manufacturing index, readings over 50.0 represent expansions. May's was a fiftieth consecutive growth indicator and the strongest in thirteen months. The data series shows that the sector rebounded in April and May following a four-year low index reading in March of 52.4.
Because the last reading was stronger than expected, forecasters are looking for a modestly weaker reading for June of 58.0. This would still be the second highest index since January. However, the services index does not have the same clout as the manufacturing index because it is relatively young (1997 vs. 1948) and the sector is so broad that varying sub-categories tend to cancel each other out.
