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Pre-Market Primer: Jobless Claims Miss Expectations

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Jobless claims hit a fresh four-year low, but missed expectations.

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Stocks and commodities fell this morning amidst disappointing economic data.

The European Commission's survey of economic sentiment fell slightly in March. The decline in sentiment was driven by falling confidence in the construction and industrial sectors. Sentiment was loftiest in Germany, where it was reported today that unemployment fell to its lowest level since at least 1998. Unemployment in Europe's biggest economy fell to 6.7% in March, slowing growth and Europe's sovereign debt-crisis and impending recession notwithstanding.

European finance ministers will be meeting tomorrow in Copenhagen, where they will discuss strengthening the European Stability Mechanism. The leaders will likely top off the emergency fund to 940 billion euros. Contagion risk from Greece is less pronounced now. Italy, which sports Europe's highest ratio of debt to GDP, is less of a risk in the eyes of investors since Prime Minister Mario Monti's labor market reforms and austerity measures. The price that Italy pays to borrow money is trailing off. Today, Italy sold 8 billion euros in long-term debt, pushing down the yield on 10-year Italian debt to 5.24%, down from 5.5% in February. Spanish workers are on strike, protesting austerity measures.

US equity index futures pointed down this morning after jobless claims missed expectations.
  • Dow (^DJI) futures are up 0.35% at 13,007.00.
  • S&P 500 (SPY) futures are up 0.43% at 1,394.20.
  • Nasdaq (^IXIC) futures rose 0.37% to 2,757.75.
Initial jobless claims fell to 359,000 last week, after the previous week's reading was revised up to 364,000. Economists expected 350,000 claims. The number of people that continue to receive unemployment benefits fell from 3,381,000 to 3,340,000. The government confirmed that the US economy grew by 3.0% in the last three months of 2011. This is the third and final reading of GDP for the quarter.

Oil futures continued to fall today after US crude stockpiles were reported to be much larger than previously thought. The glut of supply and plans by the US, France, and the UK to release strategic oil reserves are offsetting concerns over Iran. WTI futures slipped 0.41% to $104.98/barrel.

Red Hat (RHT), the maker of enterprise Linux software, beat earnings estimates and announced that it will buy back $300 million in shares. Red Hat shares rose 8.29% before the bell.

Best Buy (BBY) fell 0.71% in the pre-market after the big-box electronics store posted mixed results for the fourth quarter. Adjusted earnings beat estimates, but revenue fell short. Best Buy will close 50 stores in the US this year.

Twitter: @vincent_trivett
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