The floor of the New York Stock Exchange on Tuesday.(Photo: Bebeto Matthews, AP)
NEW YORK - Stocks were trading higher Wednesday on a positive
employment number and an aggressive outlook from farm equipment maker
Deere & Co., which reported its profit rose nearly 3% in the fourth quarter.
Investors are digesting a report from the Labor Department showing claims for jobless aid fell 41,000
to a seasonally adjusted 410,000 last week. But Superstorm Sandy
continues to distort the figures and likely will do so for another week
Two more reports out were neutral to investor sentiment in the near term:
Consumer sentiment in November gained slightly to a reading of 82.7 but
wasn't as strong as initially estimated, the University of Michigan and
Thomson Reuters said Wednesday. Initially, the index was reported at
84.9 in November from October's final 82.6 reading. Economists polled by
MarketWatch had expected a downward adjustment to 84.0
expectations, the Conference Board said Wednesday that its leading
economic indicators index rose 0.2% in October after a downwardly
revised 0.5% gain in September. It suggests the economy will continue to
grow modestly into early 2013.
The index is a weighted gauge of
10 indicators designed to signal business cycle peaks and troughs. Four
of the 10 indicators rose in October, led by the interest-rate spread (a
measure of the difference between yields on short-term and long-term
Four indicators fell, with the biggest decline in
building permits. Two indicators were unchanged. But the coincident
indicators, which measure what's going on now, might be more important.
The coincident index rose 0.1% in October, after a 0.2% in September and
a 0.4% decline in August.
"The biggest problem in the economy is
lack of demand," says Conference Board economist Ken Goldstein. "Given
that, indicators of business or consumer demand have more relevance."
• Average weekly manufacturing hours, which increase
as demand for new products increase. The number has remained unchanged
from August through October.
• The Institute for Supply Management's new orders index, up 1.9% in October.
Building permits, new private housing units. Permits were authorized at
an 866,000 annualized rate in October, down from September, but far
above the record low of 513,000 in 2009.
The leading indicators
give an idea of the future. But markets are focused on the economy now,
which makes the Index of coincident Indicators so important.
good news is that through September, there's no indication the economy
is running out of steam," Goldstein says. But he acknowledges there's no
evidence it's picking up steam either.