Jobless Claims Rise To Highest Level In Six Weeks As Dow Loses February 2013 Gains:
Economic data didn’t help stock picking as the Dow Jones Industrial Average fell to 13,880.62 losing 46.92 points or 0.34 percent. The Dow was down nearly triple digits but rebounded late in the session to almost positive territory. The NASDAQ and S&P 500 fell in sympathy nearly 1.5 percent each as investors digested negative news from the jobs market.
Initial jobless claims numbers were low and suggest the ill-effects of decreasing economic activity from the fourth quarter of 2012 are still lingering. The number of Americans applying for unemployment benefits increased 20,000 last week to a seasonally adjusted 362,000 the Labor Department said Thursday. The four-week moving average, a less volatile measure, increased to the highest level in six weeks rising 8,000 to 360,750.
Consumers will face income constraints this year with an average of 2% of payroll taxes deducted from their incomes and an increase in healthcare costs. Sequestration is set to begin next Friday and may further alter the momentum of the February 2013 rally that has faded with many of the major indexes having lost most of their gains for the month.
The TLT 20 year bond exchange traded fund is above short-term technical analysis support levels and small caps along with tech were weak lead by Apple. We are watching carefully for tech bellwethers like Google to weather the storm, if not this could be a sign of more weakness to come. We are still neutral on stocks with a defensive posture.