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US market closed higher as energy shares rally

22 Dec 2017 Evaluate

The US markets closed higher on Thursday, with energy stocks helping major indexes to end just points away from record territory. The latest economic data, which pointed to slight slowing from strong previous readings, further supported the market. The US economy’s pace of growth in the third quarter was lowered slightly to a 3.2% annual rate from 3.3% under the government’s final revision to gross domestic product. The economy expanded at a 3.1% rate in the second quarter. The core personal consumption expenditure index, the Fed’s favorite measure of inflation was softer than previously estimated, rising at a 1.3% rate down from 1.4%. The downgrade in GDP reflected slightly less consumer spending in the July-September quarter than previously estimated. Consumer spending was revised down a tick to a still solid 2.2% rate.

Meanwhile, initial US jobless claims, a tool to measure layoffs, rose by 20,000 to 245,000 in the week ended December 16. The more stable monthly average of claims increased by 1,250 and stood at 236,000. The number of people already collecting unemployment benefits, known as continuing claims, rose by 43,000 to 1.93 million. The jump in claims is the largest since a hurricane-related rise in early September. The biggest gains took place in New York, Ohio and Massachusetts. The large gain in claims won’t shake anyone’s confidence in the labor market. Layoffs remain very low and the unemployment rate is just 4.1%, the lowest in almost 17 years. The Federal Reserve said last week it expects the labor market will continue to improve next year, with the unemployment rate sinking below 4%.

On the other hand, the Philadelphia Fed’s Manufacturing Business Outlook Survey jumped to a reading of 26.2 in December from 22.7, beating the consensus forecast of a slight downtick to 21.8. Factory conditions in the mid-Atlantic are improving. In an index like this one, any reading over zero signals improvement, so December’s reading shows acceleration. The new-orders gauge of the index surged to 29.8 from 21.4, a positive signal about future activity. Shipments also rose.

The Dow Jones Industrial Average added 55.64 points or 0.23 percent to 24,782.29, the Nasdaq gained 4.402 points or 0.06 percent to 6,965.36, and the S&P 500 edged higher by 5.32 points or 0.20 percent to 2,684.57.


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