Dow Jones closes with small gains

The Dow index pared early losses to close with slight gains after a choppy day.

US stocks have been reacting to data rather than looking at the big picture for a long time now. Understandably so,as the picture is quite hazy and the global meltdown is still fresh in everyone’s mind.

The Dow Jones index pared early losses to close with slight gains after a choppy day marked by new data showing jobless claims dropped last week but still remained high.

The Dow Jones Industrial Average was up 22.10 points (0.21 per cent) to 10,594.83 in closing trades,while the tech-rich Nasdaq composite index gained 1.93 points (0.08 per cent) to 2,303.25.

Story continues below this ad

However,the broader S&P 500 index lost 0.41 points (0.04 per cent) to reach 1,124.66 points,after dropping below 1,119 points at around noon.

“The fact that the market has been just resilient,unwilling to give back anything,is pretty impressive,” said Cantor Fitzgerald analyst Marc Pado.

Shortly before the opening bell,the Labor Department released figures showing the number of Americans filing new claims for jobless benefits fell faster than expected last week,extending a four-week decline.

Claims for the week to September 11 fell to 450,000,down 3,000 from the previous week’s revised figure,better than most economists’ expectations of 460,000 new claims.

Story continues below this ad

But Andrew Gledhill,analyst at Moody’s Economy.com,said that with the current jobless claims figure,”the labor market recovery has a long way to go.”

“Claims at this level suggests that businesses are still anxious and cutting payrolls at a pace faster than what is typical in expansion,” he said.

Trade was also animated by shipping giant Fedex’s report that its profit for the quarter ending in August 31 more than doubled to 380 million dollars from previous quarter,however falling below expectations.

Fedex,which ships worldwide,is seen by many analysts as a key indicator to the health of the US and global economy.

Story continues below this ad

Its shares slumped 3.75 per cent. Other data yesterday said the US current account deficit widened in the second quarter for the fourth time in a row as imports outpaced exports.

The Commerce Department said the current account deficit increased to 123.3 billion dollars from 109.2 billion dollars in the first quarter,slightly below the consensus analyst forecast.

The Philadelphia Federal Reserve also released data showing factory activity in the region had contracted for the second consecutive month,further fueling concerns.

Stocks finished with small gains on Wednesday as investors shrugged off weaker-than-hoped-for manufacturing data.

The bond market slipped as investors sought safety.