The U.S. Labor Department released data indicating applications for unemployment benefits over the past four weeks fell closer to the 375,000 average at which the government starts to consider lowering its unemployment figure. Market watchers hope this news suggests that a strong start to job growth in January won't get wiped out by negative growth heading into the third quarter.
News that Greece had received bailout fund money as Athens moved a little closer toward forming a government reassured investors. Euro zone jitters, though far from cured, eased as Spain took over Bankia SA. The move calmed fears that Europe's fourth-largest economy would be the next domino to fall. The Bankia intervention also boosted financial stocks vulnerable to Europe's financial woes.
The U.S. housing market got a boost after Freddie Mac announced that mortgage rates were at record lows. This could indicate the housing market might be headed out of the doldrums. Single-family home prices climbed in the first quarter. There were 22 percent fewer previously owned homes on the market than in the same period last year.
Stocks. The Dow ended a six-day retreat and the S&P 500 recovered from a two-month low, but the tech-heavy Nasdaq was relatively flat. The stock price of San Jose, Calif.-based Cisco Systems, Inc. (NASDAQ:CSCO) lost more than 10 percent after the company said consumers are slowing their technology purchases below market expectations. Redwood Shores, Calif., software developer Oracle Corp. (NASDAQ:ORCL) also lost more than 2 percent of its stock value. Bellevue, Wash.-based online retail solutions provider InfoSpace, Inc. (NASDAQ:INSP) was a tech winner with its shares rising more than 20 percent after it issued a positive second quarter outlook.
Bonds. The benchmark U.S. 10-year Treasury yield rose along with stocks as investors sold bonds on good news from the U.S. labor market, pulling the yield up to 1.89 after briefly dipping below the technical resistance line of 1.8 on May 9. Meanwhile, Ford Motor Co. (NYSE: F) is issuing $1.25 billion in three-year notes after it received a Fitch Ratings upgrade. Last time the company floated debt was in January, for $1 billion.
Currencies. As expected, the euro gained a little from a three-month low on the respite from euro-zone worries. It also ended a record eight-day losing streak against the dollar. Still, the currency has been battered, losing 3.8 percent in six months. The British pound strengthened against the dollar after the Bank of England ended its second stimulus. Australia's dollar rose after the country reported an unexpected drop in unemployment.
Commodities. Corn and cotton futures were hit by the monthly USDA report predicting bumper crops this autumn. Copper rose for the first time in six sessions, following equities and shrugging at a slowdown in Chinese exports. Gold increased slightly as buyers bought to correct for a recent selloff. Oil registered slight movement in different directions, with Brent falling and U.S. benchmark rising.