Why the Dow Jumped Today
The Dow Jones Industrial Average (INDEX: ^DJI) jumped today as the U.S. announced better-than-expected jobless claims and good-but-not-great housing data, rising to its highest level since May 19, 2008.
|Dow Jones Industrial Average||+123.13 [0.96%]||12,904.08|
|S&P 500 (INDEX: ^GSPC)||+14.81 [1.10%]||1,358.04|
Widespread unemployment has been a continuous challenge for the U.S. economy the past few years. Unemployment hit a high of 10% in October 2009, and has only been slowly coming back. Today's news was that the number of new claims for unemployment insurance dropped to 348,000 last week. This is the lowest level since March of 2008 and was better than analyst expectations of 365,000. Overall claims for unemployment insurance fell by 100,000 to 3.4 million, the lowest level since August of 2008.
The other piece of good news which boosted the market today came from the housing sector. Housing starts rose 1.5% last month to an annual rate of nearly 700,000 units. While slightly less than expected, the data showed strength in the renters market, as multi-family homes were the driver of the growth with an 8.5% gain. In the largest segment of the housing market, single-family homes, construction actually fell by 1%. Economists believe the strength in the market is related to the unusually warm winter the country is having.
Microsoft (NAS: MSFT) was today's top stock, rising 4.11% to $31.28. There was some news from the company today: They announced a revamped MSN service called msnNOW, which aims to aggregate the hottest topics being searched for and talked about. The stock has been on a tear the past few months since it increased 25% in its dividend, to $0.20 per quarter. With the rise in price, Microsoft now yields 2.6%. There are other reasons to like Microsoft -- find out why Fool analyst John Grgurich calls Microsoft an "All-Star Stock" by clicking here.
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At the time this article was published Fool contributorDan Dzombakholds no position in any company mentioned.Click hereto see his holdings and a short bio. The Motley Fool owns shares of Microsoft.Motley Fool newsletter serviceshave recommended buying shares of Microsoft and creating a bull call spread position in Microsoft. Try any of our Foolish newsletter servicesfree for 30 days. We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.
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