Tech Stocks Lead Dow Higher
The Dow Jones Industrial Average followed a pattern we've become accustomed to seeing lately: wavering around the unchanged line, and breaking in one direction at the end of the session. Today, the index climbed 39 points, or 0.3%, with most of those gains coming in the last half hour.
The Dow managed to shrug off the European Central Bank's decision to again slash its growth forecast, as it now says the single-currency region's GDP will decline by 0.5% this year, and 0.3% in 2013. The European recession has been a thorn in the side of world markets this year as the U.S. struggles to speed up its recovery, and China's red-hot growth has eased. The eurozone officials also voted to leave lending rates unchanged, at 0.75%. ECB President Mario Draghi said, "We've already done much that is needed," and called current rates "very accommodative."
Back home, initial unemployment claims for last week were 12,000 lower than expected, at 370,000. The figure seems to have finally eased back down to the pace we've seen over the last several months after a spike due to Superstorm Sandy. Continuing unemployment claims were also more than 2% lower than expected, a further encouraging sign for the recovery. The Labor Dept.'s employment report, due out tomorrow, is the most closely-watched monthly economic indicator, and will likely move markets. Economists expect job growth of just 90,000 in November, after 171,000 new jobs in October, due, in part, to the effects of Sandy, and predict the unemployment rate will move up to 8%, from 7.9%.
The government appeared to make little headway on the fiscal cliff negotiations, though Republicans seem to have accepted President Obama's demand that taxes on the wealthy should go up.
Back to the blue chips: Tech stocks led the way today, as Intel jumped 1.6% on news that departing CEO Paul Otellini now expects an insider to replace him as a head of the struggling chip-maker. Otellini had earlier said that the company would be searching outside its own ranks, which sparked a sell-off a few weeks ago. He also said the company may open its factories to certain partners, which some analysts interpreted as a sign of a potential deal with Apple .
Networking leader Cisco also gained 1.4%, after Credit Suisse analyst Paul Silverstein said that the soft-networking threat has been "greatly exaggerated," meaning it should be less of a threat than some had believed for traditional providers like Cisco.
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