Stocks traded slightly lower to start and then returned
to positive territory on several
economic reports. The Labor Dept.
reported US jobless claims fell 2,000 to 370,000 last week. Claims from 2 weeks ago were revised up to
372,000. Economists expected claims to
rise to 373,000. The 4 week average of
claims dropped by 5,500 to 370,000, the lowest level in 6 weeks. In a separate report, the Commerce Dept.
showed orders for US durable goods rose 0.2% in April recording the 2nd
rise in 3 months. Economists expected a
decline of 0.4%. Removing transportation
out of the reading, orders actually declined 0.6%. A weak point in the data was in core capital
goods which fell 1.9%. In Europe, the
Munich based IFO Institute said its business climate index dropped to 106.9 in
May, down 3 points from 109.9 in April, leaving the business sentiment gauge in
Europe’s largest economy at its lowest level since November. The index is based on surveys sent to over
7,000 businesses in various sectors throughout Germany. Also reported was the Markit composite PMI
index for the Euro-Zone, which fell to a 35 month low of 45.9 from 46.7 in
April, signaling contractionary levels.
The euro dropped to a 22 month low as Euro leaders emphasized their push
to keep Greece in the euro zone. In
Asia, China reported its preliminary reading of the HSBC manufacturing PMI
index showed a drop to 48.7 in May, down from a final reading of 49.3 in
April. Commodities surged with oil
rising 1.42% to 91.18 and gold edging higher to 1572. The US dollar was mixed and the 10 yr.
treasury yield rose slightly to 1.76%.
30 yr. mortgage rates inched higher to 3.81%. The volatility index traded flat, down just
0.2% to 22.23 at 8:36 am pacific.
