Unemployment rates fell in 193 large metro areas in July, rose in 118, and were flat in 61 as the rate came in at 9.1% nationally. The August figure will be released on Friday and it is projected to stay the same.
Home prices were up slightly for the 2nd Quarter in most cities but not as much as compared to last year.
Here are the top financial stories of the day:
1) Dow up for a fourth day, turns positive for 2011-From the AP
It was a quiet end to a wild month for financial markets.
Stocks edged higher for a fourth straight day Wednesday on a report that factory orders surged in July.
The Dow Jones industrial average turned higher for the year. The Dow's winning streak ended a tumultuous August that included four consecutive days of swings of 400 points or more, a first in the history of the index.
A surge in factory orders indicated to investors that the manufacturing industry is still healthy. Orders rose 2.4 percent in July, the largest increase since March, after falling 0.4 percent in June. That decline caused worries that manufacturing, one of the best-performing areas of the U.S. economy since the recession ended two years ago, might be starting to sputter.
The Dow rose 53.58 points, or 0.5 percent, to end at 11,613.53. It fell 4.4 percent for the month, although it is now up 0.3 percent for the year. Aluminum maker Alcoa Inc. rose 3.6 percent, the most of the 30 companies that make up the Dow average.
Joy Global rose 1.3 percent after the mining equipment maker said its earnings rose 46 percent because of strong global demand for commodities like copper and coal.
That helped to push up other stocks in the mining and commodities industry. Equipment giant Caterpillar Inc. rose 1.3 percent.
The Standard & Poor's 500 index rose 5.97, or 0.5 percent, to 1,218.89. It fell 5.7 percent for the month. Financial stocks were the worst performers in August as many worked to raise capital to comply with new regulations.
On Wednesday, nine of the 10 company groups that make up the index rose. The telecommunications industry was the only one to fall.
AT&T Inc. plunged 3.9 percent after the Justice Department filed a lawsuit to stop the company's $39 billion merger with rival T-Mobile USA. Sprint Nextel Corp., which opposed the deal, rose 5.9 percent.
The Nasdaq composite index rose 3.35, or 0.1 percent, to 2,579.46. It fell 6.4 percent for the month.
The Dow, S&P and Nasdaq each had their worst August since 2001.
The market is closing out an extraordinarily volatile month. The Dow was as high of 12,132 this month and as low of 10,719 in the span of 23 trading days.
The volatility that began in late July seeped into August amid the debate in Washington over extending the country's borrowing limit to avoid a debt default. The declines gained speed the week ended Aug. 5, when all three major indexes entered a correction, or a decline of 10 percent or more from a recent peak.
Investors feared that Italy or Spain, Europe's third and fourth largest economies,would be unable to repay their debts. Some economists began to worry that the U.S. would slip into another recession.
Then came even worse news. Standard & Poor's lowered the nation's credit rating, and stocks plunged. The S&P 500 hit a low for 2011 on Aug. 8 and the Dow had four consecutive days of 400-point swings, the first time that's happened in its 115-year history.
Stocks had their first positive week in a month the week ended Aug. 26 after Federal Reserve Chairman Ben Bernanke said the U.S. remains on pace for long-term economic growth. The Dow has risen for seven of the last eight days.
Bond prices have also been volatile. The yield on the 10-year Treasury note briefly fell to 1.98 percent on Aug. 18, a record low, on weak manufacturing data from the Philadelphia Federal Reserve. On Wednesday, the yield rose to 2.21 percent from 2.18 percent late Tuesday.
Some investors chose to avoid the swings in stocks and bonds by parking their money in gold, but even that wasn't entirely a safe bet. Gold hit a record high of $1,891.90 an ounce Aug. 22. Two days later, it fell $104 to $1,757.30 an ounce. It rose $1.90 to $1,831.70 an ounce Wednesday.
Rex Macey, chief investment officer of Wilmington Trust, said he expected more sudden turns in the stock market until investors can determine if the U.S. economy is headed for another recession or a recovery.
"When you're on the edge of growth versus recession, that's a big difference," he said. "Being near the precipice means that markets are going to be more volatile."
2) Unemployment rates fell in most US cities in July-From the AP
Unemployment rates fell in a majority of U.S. cities in July, despite a weak economy that is producing few jobs.
The Labor Department said Wednesday that unemployment rates dropped in 193 large metro areas, increased in 118 and were flat in 61. That's a sharp change from June, when unemployment rates rose in more than 90 percent of metro areas.
The biggest monthly decrease was in Morgantown, W.Va. The unemployment rate there fell from 6.6 percent in June to 5 percent in July, mostly because people stopped looking for work. The government only counts people as unemployed if they are actively seeking work.
Yuma, Ariz., a farming hub that depends heavily on migrant farm work, experienced the largest increase, from 27 percent in June to 30 percent in July.
Unlike the national data, metro unemployment rates are not adjusted for seasonal changes, such as the start of the school year.
In July, the U.S. economy added 117,000 net jobs and the national unemployment rate fell to 9.1 percent.
Still, the economy needs roughly twice that number of jobs to significantly lower the unemployment rate.
Many businesses pulled back on hiring this spring, after high gas prices, scant wage gains and supply disruptions caused by the Japan crisis contributed to a slowdown in growth.
The economy expanded at an annual pace of just 0.7 percent in the first half of the year. That's the weakest six months of growth since the recession officially ended two years ago.
The July-September quarter is off to a better start. Consumer spending rose 0.8 percent last month, the largest gain in five months. Americans bought more cars and spent more to cool their homes during a heat wave.
Twelve cities reported unemployment rates greater than 15 percent. Eleven of those cities were in California. El Centro, Calif., had the nation's highest rate at 30.8 percent. It was followed by Yuma, Az. Both cities are big agricultural producers.
Bismarck, N.D., had the nation's lowest rate, at 3 percent. It was followed by Fargo, N.D., at 3.7 percent, and Lincoln, Neb., at 3.8 percent. Eight of the 10 metro areas with unemployment rates less than 5 percent were in the upper Midwest. North Dakota, in particular, has been helped by a boom in its oil drilling industry.
3) Gloom Clouds Slight Rise in Home Prices-From The Wall Street Journal
U.S. home prices increased in the second quarter but fell compared with the same period last year, painting a mixed picture of the real-estate market amid plummeting consumer confidence.
The S&P/Case-Shiller Home Price Index, released Tuesday, rose 3.6% for the quarter ended in June, but fell 5.9% annually, sending prices back to pre-boom 2003 levels. Consumer confidence, meanwhile, sank to its lowest level in two years, according to the Conference Board, a private research group.
Confidence fell to a reading of 44.5 in August from 59.2 in July. That is its lowest level since April 2009 and much worse than most economists had expected.
"Coming in the wake of a rancorous debate over the debt ceiling and the downgrade of U.S. debt, such a drop in confidence could hardly be much of a surprise," Nomura's chief U.S. economist David Resler wrote in a note to clients. "Nonetheless, declines in confidence run the risk of becoming self-fulfilling if they affect buying intentions."
The latest indicators also don't account for Hurricane Irene, which caused flooding and other damage in the East over the weekend. Total Mortgage, a lender in Milford, Conn., has begun asking borrowers in affected areas for an affidavit pledging that their home values and conditions remain the same as the initial appraisal.
Homes in areas seeking funds from the Federal Emergency Management Agency likely will have to undergo an additional inspection before closing, said Total Mortgage President John Walsh. While the numbers of affected buyers and sellers might be small, he says an already-shaky housing market can't handle much more.
"Any impact is a large impact," Mr. Walsh said. "We have a situation where people are going to be focusing on repairing their homes, and that might make people nervous about buying a home along the coast."
The housing gauge showed prices generally rose in its 20-city index. Minneapolis and Chicago led gains, both at 3.2%, while prices in Portland, Ore., remained flat. But across the board, prices were down from a year ago. Minneapolis posted the steepest annual decline, at 10.9%.
Still, the price increases remain good news in an industry that has had little to cheer. "The pace of sales is better than a year ago," said Vance Shutes, an associate broker for Real Estate One's Ann Arbor, Mich., office. "In our northern suburbs, where the automotive companies were just decimated, those markets are now rebounding strongly as the auto companies have started bringing people back after five years of shedding them."
Indeed, one bright spot of the consumer-confidence report was that the percentage of people who intend to buy a car or a major appliance edged higher. Yet far fewer respondents said they plan to buy a house in the next six months.
One economist, citing uncertainty in the labor and stock markets, called Tuesday's housing data, which reflect prices only until June, the "last hurrah" before prices begin to slide. The National Association of
Realtors reported this week that pending home sales—which measure the number of contracts to buy previously owned homes—fell 1.3% after two months of gains.
"The real concern is what's going to happen in July and August," said Stan Humphries, chief economist at real-estate firm Zillow Inc. "Consumers have been getting a lot of bad data points about the economy and that is going to get translated into the housing market."
Quote of the Day from Dave Ramsey.com:
All growth depends upon activity. There is no development physically or intellectually without effort, and effort means work. — Calvin Coolidge
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