College Stock: Penny Stock News

Source: The Associated Press, Stephen Bernard, AP Business Writer, August 26, 2010 12:22 PM EDT

NEW YORK (AP) — Major stock indexes turned mixed Thursday as a drop in new claims for unemployment benefits wasn’t enough to resolve worries about the economy.

The Dow Jones industrial average fell 9 points in midday trading after getting an early 45-point lift from the weekly unemployment report. Broader indexes also fluctuated.

The early boost from the positive jobless claims report turned out to be fleeting as investors returned their focus to nagging problems in the economy.

The market’s attention is already turning to a speech early Friday by Ben Bernanke to see if the Federal Reserve chairman sheds any light on the conundrum that stock investors are currently wrestling with: How weak is the U.S. economy and will it slide back into recession?
Investors want to “see if the pulse of the Fed is beating at a fast rate with anxiety over the economy,” said Peter Cardillo, chief market economist at Avalon Partners Inc.

The Labor Department said first-time claims for unemployment benefits dropped to 473,000 last week, after jumping above 500,000 for the first time since November a week earlier.

Economists were expecting a more modest drop to 490,000, according to Thomson Reuters.
“On the positive side, claims came down slightly compared to the shock last week,” said Oliver Pursche, executive vice president at Gary Goldberg Financial Services. “That said, the number still remains stubbornly high.”

The latest jobless claims report suggests that hiring remains weak. In a healthy economy, weekly claims usually fall below 400,000. At the height of the recession in March 2009, weekly claims peaked at 651,000.

Investors are still worried about a persistently high unemployment rate of 9.5 percent and a general reluctance of employers to hire workers.

On the positive side, this week’s report marked the first decline after three straight weekly gains.

High unemployment remains the biggest obstacle to a stronger recovery because people worried about their jobs have cut back on spending. Companies have been slow to hire because of uncertainty surrounding tax, financial regulation and health care reform costs as well as worries about consumer demand.

In midday trading, the Dow fell 8.90, or 0.1 percent, to 10,051.16. The Standard & Poor’s 500 index rose 0.37, or less than 0.1 percent, to 1,055.70, while the Nasdaq composite index fell 3.41, or 0.2 percent, to 2,138.13.

About four stocks rose for every three that fell on the New York Stock Exchange, where volume came to 349.5 million shares.

Bond prices traded in a tight range, indicating not all investors are upbeat about the unemployment report and still holding onto the relative safety of government debt. Investors tend to buy up Treasurys, driving interest rates lower, when they are worried about economic growth.

The yield on the 10-year Treasury note dipped to 2.53 percent from 2.54 percent late Wednesday. Its yield helps set interest rates on mortgages and other consumer loans.
Long-term bond yields are hovering around levels not recorded since early 2009, when the country was in the depths of the recession and stocks hit 12-year lows.

Low interest rates usually help to drive new growth because it makes it cheaper to borrow and buy everything from clothes to cars to houses. However that isn’t encouraging shoppers now because they are worried about jobs and opting to save instead.

In corporate news, Dell Inc. said data storage maker 3Par Inc. accepted its raised takeover bid of 1.52 billion, or $24.30 per share. Dell’s revised offer was better than rival Hewlett-Packard Co.’s offer of $24 per share.

Dell shares rose 9 cents to $11.87, while 3Par dropped 67 cents, or 2.5 percent, to $26.09. Shares of 3Par had jumped as the two computer makers appeared set for a bidding war that investors thought might drive the price even higher. Dell initially offered $18 a share for 3Par earlier this month before Hewlett-Packard jumped in with its bid.

Hewlett-Packard shares rose 11 cents to $38.35.

European markets got a lift from an improved consumer confidence reading on Germany’s economy. Germany’s DAX index rose 0.2 percent. France’s CAC-40 climbed 0.7 percent and Britain’s FTSE 100 rose 0.9 percent.