Stocks continue rally after drop in jobless claims

Stocks extended their September rally Thursday after more encouraging news on the job market.

The Dow Jones industrial average rose 60 points in late morning trading, putting it back into positive territory for the year, after the Labor Department said first-time claims for unemployment benefits fell last week to the lowest level in two months.

Jobless claims are fueling the rally? That's a reach. Weekly jobless claims tend to be heavily revised and extremely volatile. That's why most analysts study its four-week moving average rather than single data points.

The rally, however, needs a logical economic reason for the headlines. Connected, leveraged money flows, which began supporting the market well in advance of today's data, doesn't carry the same MOPE multiplier.

Jobless claims remain in a cyclical up tick. This is why stimulus II – apparently public program under $100 billion is no longer considered stimulus, has been gaining support.

Average Weekly Initial Claims State Unemployment (AWIC) And YOY Change:


Source: finance.yahoo.com