Source: The Canadian Press
Stock markets appeared set to open higher Thursday after a report showed the number of Americans signing up for unemployment benefits dropped to the lowest level in two months – a sign the economy may not be as weak as some had feared.
Stocks have rallied since the beginning of the month as economic indicators have shown mild improvements, although investors are still highly sensitive to bad news.
A report from the U.S. Labor Department said new unemployment claims fell last week by a seasonally adjusted 27,000 to 451,000. Economists had predicted a much smaller decline of just 2,000.
However, even with latest decline, claims are still much higher than they would be in a healthy economy. When the economy is growing strongly, claims drop to below 400,000.
Futures on the S&P 500 added 7.4 points to 1,106.7, while Dow Jones industrial average futures gained 57 points to 10,449. On the Nasdaq, futures were up 13.5 points to 1,891.0 ahead of the opening bell.
The Canadian dollar continued its rise, adding 0.43 of a cent to 96.82 cents US a day after the Bank of Canada announced it would raise its key lending rate to one per cent.
In Canada, investors will also react to a report from Statistics Canada that Canada’s trade deficit with the world widened to a record $2.7 billion in July from $1.8 billion in June as exports fell and imports grew.
South of the border, the U.S. trade deficit narrowed significantly in July to $42.8 billion as exports climbed to the highest level in nearly two years, the Commerce Department reported. This reflected big gains in sales of U.S.-made airplanes and other manufactured goods, while imports declined.
Canadian markets will also respond to data from the Canada Mortgage and Housing Corp. that showed the number of housing starts in August was up 3% from July to a seasonally adjusted annual rate of 183,300. Meanwhile, Statistics Canada’s new housing price index fell 0.1% in July – the first decrease in 13 months.
The October crude contract on the New York Mercantile Exchange gained 51 cents to US$75.18 after a report showed U.S. crude inventories fell more than expected, suggesting demand may be improving.
The December gold contract slipped 60 cents to US$1,256.90.
Overseas, Britain’s FTSE 100 rose 1.1%, Germany’s DAX index gained 0.8%, and France’s CAC-40 rose 1.2%.
Thursday outlook: Stocks set to open higher as U.S. unemployment claims drop
U.S. Labor Department report beats expectations
- By: Kristine Owram
- September 9, 2010 September 9, 2010
- 08:12