If we're to believe Associated Press reporter Daniel Wagner, this morning's report from the Department of Labor on unemployment claims revealing that initial claims during the week ended August 6 fell to 395,000, was "good news." Why, according to Wagner, that drop, all by itself, it was "enough to catapult stocks," pushing the Dow up by 423 points in Thursday's trading.
Uh, not exactly, Daniel. First, though the decline in initial claims was in the right direction, it was only 5,000, or 1.25%, less than last week's original number of 400,000 (naturally revised up to 402,000 this week), and an even tinier 3,000 fewer than the initial number two weeks ago. If (more like when, given the track record of previous weeks) it's revised up by 3,000 or so, it will be even less impressive. Huge advances in the Dow do not arise from such tiny improvements.