After a precipitous drop this morning, the Dow Jones Industrial Average (DJINDICES: ^DJI ) has completely recovered, and is sitting at a 36-point gain as of 11:30 a.m. EDT. But with plenty of economic data and international woes to inspire investors today, there is little chance that the index will remain steady for the rest of the short trading day.
Jobs data
Though today's data is just a precursor to the Friday Employment Situation report from the Labor Department, the numbers indicate that the job market is stable. Private businesses added 188,000 new employees during June, which was well above the estimated 160,000. Add to that increase a steadying of new jobless claims, with the past week's claims falling below estimates, and you have encouraging labor market news heading into Friday's report.
The reaction to this information may vary, since it will likely be viewed as negative news for the Fed's stimulus-tapering timeline, but for long-term investors this is a good sign that the economy is still headed in the right direction.
A tale of international woes
The Eastern Hemisphere is in turmoil this morning. Political debacles in Portugal and Egypt, and economic concerns in the eurozone, are all weighing heavily on the markets.
Portugal has seen high-ranking governmental officials resign in the past few days, prompting fears within the eurozone that new leadership could once again put pressure on the group to help bail out the country, leading to another crisis. Bond yields within the country have skyrocketed, while the Portuguese stock market has lost 6% already.
Egypt is dealing with another sort of crisis, with President Mohammed Morsi refusing to follow military demands that he step down. Growing concern over the situation has spread to concerns about the stability of the Middle East overall, with the potential for higher crude oil prices hitting everyone's bottom line.
Some good news
If you're still in the market for a new mortgage, there may be some slightly good news for you this morning. Freddie Mac has reported that mortgage rates have slowed a bit after last week's run-up. After a high of 4.46% last week, the lower 4.29% average is still a deal (historically speaking) for new buyers. Bank of America (NYSE: BAC ) and JPMorgan (NYSE: JPM ) may be in the red so far in trading, but both banks would be more than happy to welcome new mortgage customers.
Refinancing activity has slowed due to the higher rates, and the new average is likely still too high to tempt new business in that segment of home lending. Wells Fargo (NYSE: WFC ) has already noted that the refinancing activity was a big driver for its first quarter and the slowdown from higher rates will initially be hard to offset. But investors in all three banks should be confident that they can weather the volatility that may occur as the markets return to a normalized interest rate environment.
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