The Joplin Globe, Joplin, MO

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June 18, 2009

<img src=" http://www.joplinglobeonline.com/images/zope/thursday.gif" border=0> U.S. stock futures strengthen on employment data

(AP) — A sign of improvement in the labor market restored some of investors’ optimism about the economy.

Stock futures turned higher Thursday after the government reported that the overall number of people drawing unemployment benefits fell for the first time since early January.

Futures had been mixed as traders awaited congressional testimony from Treasury Secretary Timothy Geithner on the White House’s proposed overhaul of the nation’s financial regulatory system.

But investors grew more upbeat after the Labor Department reported that total unemployment insurance rolls fell last week by 148,000 to 6.69 million, the largest drop in more than seven years. The drop breaks a string of 21 straight increases.

New unemployment claims edged rose by 3,000 but economists had expected that the number of people continuing to receive unemployment benefits would set another record.

Dow Jones industrial average futures rose 28, or 0.3 percent, to 8,465. Standard & Poor’s 500 index futures rose 3.30, or 0.4 percent, to 908.60, while Nasdaq 100 index futures rose 3.25, or 0.2 percent, to 1,456.75.

Stocks fell over the first three days of this week amid growing pessimism about an economic rebound.

Major European markets were steady after a slide in Japan.

Investors will be looking to Geithner’s testimony before the Senate Banking Committee at 9:30 a.m. and the House Financial Services Committee at 1 p.m. for more insight into how the biggest changes to financial regulation since the 1930s might unfold. House Republicans, for example, said Obama’s plan would hurt the market by imposing unnecessary regulation.

The plan outlined by President Barack Obama on Wednesday would give new powers to the Federal Reserve to oversee the entire financial system and would also create a consumer protection agency to guard against credit and other abuses.

Traders this week are also watching for volatility ahead of Friday’s quarterly “quadruple witching” day, which marks the simultaneous expiration of a number of different options contracts. Analysts say stocks are more likely to push higher during the expirations, which often bring heavy and fractious trading.

Stocks mostly fell Wednesday and are down sharply for the week, with the S&P; 500 index registering a loss of 3.8 percent in three days. After modest gains last week and the slide this week, traders are worried that a three-month rally that pushed stocks up 40 percent had gone too far.

Investors are now eager for any news that could re-ignite the market’s climb or signal how long it might take the economy to recover from the recession that began in December 2007.

Bond prices fell after the jobs data, pushing the yield on the benchmark 10-year Treasury note to 3.76 percent from 3.69 percent late Wednesday.

The dollar was mixed against other major currencies, while gold prices rose.

Light, sweet crude fell 2 cents to $71.01 per barrel in electronic trading on the New York Mercantile Exchange.

After the opening bell, the Philadelphia Federal Reserve is expected to report on regional manufacturing conditions.

Meanwhile, a private sector group’s forecast of economic activity is expected to have risen for a second straight month in May.

The Conference Board’s index of leading economic indicators likely rose 0.9 percent last month, according to analysts. A 1 percent gain in April was the biggest in more than three years. The index hadn’t risen in seven months.

The reports are due at 10 a.m.

Overseas, Japan’s Nikkei stock average fell 1.4 percent. In afternoon trading, Britain’s FTSE 100 fell 0.4 percent, Germany’s DAX index rose 0.1 percent, and France’s CAC-40 rose 0.3 percent.

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