Wall Street prepared to end a dreadful year quietly Wednesday as investors took modest comfort from a sharp drop in weekly unemployment claims.
The Labor Department reported initial applications for unemployment benefits fell by 94,000 to 492,000 for the week ending Dec. 27. The drop, which partly reflects seasonal adjustment difficulties tied to the Christmas holiday, was greater than analysts had expected. But the number of people still claiming benefits has climbed to the highest level since 1982.
Traders focused on getting through the final session of 2008. Trading is expected to proceed quietly as most investors have closed their books on what was a punishing year. The Dow Jones Industrial Average begins the session down 35% for 2008, while broader indices are down about 40%. It marks the worst year for the Dow since 1931.
Nothing that emerges Wednesday will erase the enormous losses of the past 12 months but investors would nonetheless like to hold or add to the sizable gains made Tuesday when financial shares led stocks higher.
Dow Jones industrial average futures rose 18, or 0.21%, to 8,658. S&P 500 index futures rose 3.10, or 0.35%, to 891.30, while Nasdaq 100 index futures fell 3.25, or 0.27%, to 1,202.75.
On Tuesday, stocks rose as investors applauded the government's decision to extend $5 billion to General Motors' (GM Quote - Cramer on GM - Stock Picks) troubled financing arm, GMAC Financial Services. Major stock indices rose more than 2% in light trading, including the Dow, which added 185 points. Light volume can skew market moves.
Bond price fell Wednesday. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 2.10% from 2.06% late Tuesday. The yield on the three-month T-bill, considered one of the safest investments, rose to 0.09% from 0.06% Tuesday.
The dollar was mixed against other major currencies, while gold prices fell.
Light, sweet crude fell $1.19 to $37.84 a barrel in premarket electronic trading on the New York Mercantile Exchange.
Overseas, Britain's FTSE 100 rose 0.94% and France's CAC-40 added 0.03%. Markets in Japan and Germany were closed for holidays.
