Unemployment rate falls in most states as workforces shrink; job creation weakens

WASHINGTON (AP) — The unemployment rate fell in most states in June, mainly because more people gave up searching for work and were no longer counted.

Fewer states saw job increases, the latest evidence that the economic recovery is slowing.

The jobless rate declined in 39 states and Washington, D.C. last month, the Labor Department said Tuesday. That’s a slight improvement from May, when 37 states saw their rates decline.

But only 21 states saw net job gains in June, the government said. That compared to 41 the previous month and is the fewest this year.

The decline in job creation reflects the layoff of thousands of temporary census workers. Those jobs inflated total payrolls in May and then reduced them in June.

Still, the report also indicated that businesses aren’t hiring many new workers. Nationwide, private employers added a net gain of only 83,000 jobs last month. The national unemployment rate dropped to 9.5 percent in June from 9.7 percent the previous month, as about 650,000 people stopped looking for work.

New York’s unemployment rate fell to 8.2 percent from 8.3 percent the previous month. But the state lost 8,500 private-sector jobs, the second-straight decline in private employment. California’s unemployment rate also declined, but the state gained just 1,300 private-sector jobs.

Wisconsin, meanwhile, saw its jobless rate fall to 7.9 percent from 8.2 percent the previous month. But the state’s work force fell by 13,600, suggesting the decline was the result of people giving up job hunts. Furthermore, the state lost 1,000 private-sector jobs last month.

Nevada, battered by a housing slump and a drop in tourism, posted the nation’s highest unemployment rate of 14.2 percent. That’s the state’s highest since records began in 1976.

In May, Nevada displaced Michigan from the top spot for the first time in more than four years. Michigan’s unemployment rate fell to 13.2 percent in June, the nation’s second-highest. It was followed by California with 12.3 percent and Rhode Island with 12 percent.

The report did include some bright spots. New Hampshire reported the largest drop in unemployment, to 5.9 percent from 6.4 percent. That was due in part to a net gain of 1,900 jobs.

The state added jobs in manufacturing, education and health services, and professional and business services, which includes temporary jobs.

Texas, Kentucky, Arkansas, Louisiana and North Carolina reported the largest job gains last month.

Texas added 14,000 jobs, with big gains in manufacturing, construction and professional and business services. Kentucky gained 6,200 jobs, mostly in manufacturing, construction and education and health services.

North Dakota continued to post the lowest unemployment rate, with 3.6 percent. It was followed by South Dakota at 4.5 percent and Nebraska at 4.8 percent.

Christopher S. Rugaber, AP Economics Writer, On Tuesday July 20, 2010, 12:05 pm

Exchange-traded funds seem to be advertised as a magic bullet for whatever ails an investor. They’re easy to buy and sell. Many have low fees. What they hold is transparent. And because there are so many of them — more than 1,000 in the United States, according to Forefront Advisory — investors can invest in very specific ways, singling out telecommunication companies, for instance, or European government debt.

One of the recent claims made by proponents of E.T.F.’s is that they are ideal for the volatile markets we’re in. One reason is that the funds are essentially baskets of securities sold as one stock. And like a stock, the fund is priced throughout the day so it can be bought and sold more easily than a mutual fund. These funds are also so specific that they allow people to invest in particular niches. Investing in E.T.F.’s in general, the argument goes, allows some investors to reduce volatility, while allowing others to exploit swings in the market. But is this true? Can these funds really do for investors what their proponents say they can, or are they just another investment that goes up and down like any other?

E.T.F.’s, like all popular things, have vocal detractors. No doubt these people will send e-mail to note the funds that have shut down or failed to perform in line with the indexes they track. True, but I want to look specifically at the advantages and disadvantages of investing some portion of a high-net-worth portfolio in exchange-traded funds.

Proponents see benefits in a volatile market in investors’ ability to buy and sell the funds quickly and to focus on certain indexes or sectors.

“The one thing I think that E.T.F.’s allow you to do in a volatile market is divorce yourself from your emotions as an investor,” said Daniel Faucetta, principal of global exchange-traded funds strategies for Forefront Advisory. “We’ll hear from investors who say we love G.E. or Apple. That emotional attachment to a position can be harmful. It’s much easier to buy and sell an E.T.F. from an emotional standpoint.”

He said the firm’s models were meant to find trends. In doing so, he said, they often miss the first 10 percent on the upside and lose 10 percent on the downside. The strategy adapts to what is already happening, rather than trying to predict which might happen. Its goal is to outperform the MSCI All World Index, an index of global stock funds — it has done so by 1.5 percentage points over the last five years — but to do so with half the volatility.

Such an approach irks someone like John Calamos, founder of Calamos Investments and a proponent of a different low-volatility strategy. He considers exchange-traded funds the domain of a manager who has given up.

“He says, ‘I can’t pick stocks. I don’t know if Apple is any better than BP so I’ll just pick an E.T.F. and have both of them in there,’ ” Mr. Calamos said. “If I’m no good at picking stocks, am I better at picking groups of stocks? That’s silly. We believe active management works.”

His strategy, which relies heavily on convertible securities, was born out of a similarly rough time in the 1970s, and his two funds, meant to capitalize on volatile markets, were both up around 15 percent last year with fewer swings. He admits, though, that these strategies do not perform as well in less volatile markets.

Daniel Weiskopf, who runs Forefront’s E.T.F. strategy with Mr. Faucetta, said the best active managers might have an advantage in volatile markets, but finding the best ones could be difficult. He hews to the belief that 80 percent of the returns come from picking the sector and only 20 percent from the individual securities.

In terms of funds intended to limit losses, the options seem limited. There is the PowerShares BuyWrite E.T.F., which replicate a traditional covered call strategy to limit the depreciation of a stock in return for giving up some of its appreciation. And a 2008 University of Massachusetts study, “Collaring the Cube,” showed how a similar strategy could be applied with the popular Nasdaq exchange-traded fund, QQQQ.

Ben Marks, president of Marks Group Wealth Management, argued that a properly constructed basket of E.T.F.’s could be an effective hedge against market volatility in and of itself. This is the goal of his Alternative Strategy Portfolio, which currently consists of investments in eight separate funds.

“This portfolio is really meant to take the bumps out of the road,” he said. “It’s meant to be noncorrelated to equities and bonds.”

One recent addition was a fund focused on base metals in the belief that emerging markets like China are going to drive up metal prices — creating volatility in commodity prices — while a recent success was a fund that bet that European currencies would lose value against the dollar.

None of this is risk-free, and some exchange-traded fund. investments could create problems for investors far greater than a bit of volatility. One comes from leveraged funds and so-called inverse funds, which return the opposite of what an index does. The danger here comes if your assumption is wrong and instead of being down 5 percent the index being tracked is up 20 percent.

The more common risk is in people jumping on the exchange-traded fund bandwagon in the hope that it will save their portfolios.

“There are so many E.T.F.’s now and the industry has been booming, that they really have become a catchall,” said Joseph Jennings, investment director in Baltimore for PNC Wealth Management. “They’re a good tool to manage diversification and risk in a portfolio as long as the investor is aware of what he is buying.”

He pointed to a popular telecommunications fund that was meant to track that industry. Some 45 percent of its holdings were in AT&T and Verizon, making it not very broad. In other words, buyer beware.

See today’s average mortgage rates across the country. Source: Bankrate.com

Countries upbeat on bank tests, some doubts linger

On Monday July 19, 2010, 8:09 am EDT

LONDON (Reuters) - Bankers and officials in Spain, Greece and Belgium joined a chorus of countries expecting no big shocks from Europe’s stress test of its banks amid lingering doubts the health check will be severe or transparent enough.

The Committee of European Banking Supervisors (CEBS), which is overseeing the test of 91 banks, said results will be released on an aggregated and bank-by-bank basis from 1600 GMT on Friday.

CEBS will release an overview, and banks or national regulators will release individual results.

The tests will assess how banks would cope with another economic downturn and losses on Greek and some other government bonds. The aim is to restore investor confidence by pinpointing any weak spots and forcing vulnerable banks to raise cash.

“With banks having already rallied and with many countries having declared that their banks are likely to pass, we see risks of disappointment,” said Jon Peace, analyst at Nomura in London.

He said shares could extend gains if sufficient transparency allowed investors to make their own calculations of the risks, and if the recapitalization mechanisms such as Spain’s FROB, Germany’s SoFFin and a wider European Financial Stability Facility are available for struggling banks.

Belgium’s KBC and Dexia have passed the tests, two Belgian newspapers said over the weekend, citing sources saying the government would not be called upon again to bail out either group.

Spain’s banks and cajas will get no nasty surprises from the tests, according to the director general of the Spanish Confederation of Savings Banks (CECA).

But Jose Antonio Olavarrieta did not rule out banks having to seek more capital from the Bank of Spain’s restructuring fund FROB.

He said in an interview with ABC newspaper he hoped the tests would help improve conditions in money markets, which have shut out smaller Spanish banks.

“They (saving banks) are the ones the market is more concerned about because they have been accessing the wholesale markets and are very much part of the local financial system,” said Ian Henderson, fund manager JP Morgan Global Financials fund.

“The idea of the stress test is to reassure Asian sovereign wealth funds investing in paper issued by these savings banks that in fact they are not buying a lemon. They want some confidence to be restored to the system,” he said.

Greece’s central bank chief said he expected the country’s six lenders being tested to come “smoothly” through the stress tests.

The regional Spanish cajas, Germany’s landesbanks and Greece’s bank sector top the list of those most likely to need capital under a stressed scenario, analysts have said.

Barclays Capital analysts estimated the capital needs of the cajas at 36 billion euros, 34 billion euros for the landesbanks and 8.6 billion euros for Greek banks.

A growing concern is the test criteria will not be consistently applied across the 20 countries.

European Union officials have agreed the key criteria of the tests, but there are fears national regulators will differ on what qualifies as core capital, for example.

(Reporting by Steve Slater and Cecilia Valente in London, Philip Blenkinsop in Brussels, Nigel Davies in Madrid and Harry Papachristou in Athens; Editing by Hans Peters and David Cowell)

After Bank of America (BAC) and Citigroup (C) reported earnings today, their stocks and the market across the board sold off around 3%.  What did BAC & C say about the new Financial Regulatory Bill, which received enough votes yesterday to Pass?

Exec’s for BAC & C commented that the new Fin Reg Bill will impact their consumer business very little or not at all, and one exec even said the new bill may be a good thing.  I find this extremely encouraging, as I have been waiting for the bill to pass and learn what language makes up the bill for several weeks.  Many of the items in the new Fin Reg Bill are not expected to be implemented from a couple years to a few years.  I have listed BAC & C as a Buy for over a year, and this new bill does not change my opinion of BAC, C, BCS, MS, and UBS.

The credit card companies may see a decline in their revenue with this new bill, as interchange fee’s a card company charges retailers is going to be lowered and restricted.  This bill will definitely hurt Mastercard, Visa, Amex & Discover.

A double-dip recession has been talked about today as one driver of the declining market, however, I do not see that happening.  What is the definition of a double-dip recession any way?  I do agree the market and economy need the Unemployment numbers to decline, if not, Mr. & Mrs. America will have limited funds to spend on non staple products, which could dramatically change the earnings forecasts for retailers up and through the holiday season.

Do not be surprised if the Dow Jones Industrial Average (DJIA) dips to 9,800 as it did a few weeks ago, in the coming weeks, however if/when it does, keep buying quality stocks.  For my list of quality stocks, check with this website periodically for my Stock Picks of the Week!

It’s days like this in the stock market, you should be glad you have good health!  I wish all my readers a great weekend!

The ink is not even dry on the new rules for Wall Street, and already, the bankers are a step ahead of everyone else.

In ways large and small, the broad overhaul of the nation’s financial regulatory system that was approved by Congress on Thursday will eat into the profits of the nation’s banks.

So after spending many millions of dollars to lobby against the legislation, bankers are now turning to Plan B: Adapting to the rules and turning them to their advantage.

Faced with new limits on fees associated with debit cards, for instance, Bank of America, Wells Fargo and others are imposing fees on checking accounts. Compelled to trade derivatives in the daylight of closely regulated clearinghouses, rather than in murky over-the-counter markets, titans like J.P. Morgan Investment Bank and Goldman Sachs are building up their derivatives brokerage operations. Their goal is to make up any lost profits — and perhaps make even more money than before — by becoming matchmakers in the vast market for these instruments, which critics say were a principal cause of the financial crisis.

Even when it comes to what is perhaps the biggest new rule — barring banks from making bets with their own money — banks have found what they think is a solution: allowing some traders to continue making those wagers, as long as they also work with clients.

Banking chiefs concede they intend to pass many of the costs associated with the bill to their customers. The legislation, which is expected to be signed into law by President Obama next week, is intended to address the causes of the 2008 economic crisis and curb the most risky behavior on Wall Street.

“If you’re a restaurant and you can’t charge for the soda, you’re going to charge more for the burger,” said Jamie Dimon, the chairman and chief executive of JPMorgan Chase, after his bank reported a $4.8 billion profit for the second quarter on Thursday. “Over time, it will all be repriced into the business.”

Short term, the changes imposed by this legislation and other recent reforms could cut profits for the banking industry by as much as 11 percent, analysts estimate. Long term, Wall Street will be able to plug at least part of that hole by doing what it does best: inventing products that take advantage of the new regulations.

At Morgan Stanley, the board will hear strategies on how to adapt when it meets next week. Citigroup has already shed risky investment units forbidden by the bill, freeing up cash it can quickly deploy into new areas. At J.P. Morgan, 90 project teams are meeting daily to review the rules and retool businesses accordingly.

“We’ve been gearing up for this like a merger,” Mr. Dimon said in a recent interview. He said new restrictions on credit and debit card fees, as well as derivatives, could cost his bank at least several hundred million dollars annually but added that the bank would find new sources of revenue to plug that gap.

There are signs that is already happening across the industry. Free checking, a banking mainstay of the last decade, could soon go the way of free toasters for new account holders. Banks are already moving to make up the revenue they will lose on lower overdraft and debit card transaction charges by raising fees on other services.

Banks like Wells Fargo, Regions Financial of Alabama and Fifth Third of Ohio, for instance, recently began charging new customers a monthly maintenance fee of $2 to $15 a month — as much as $180 a year — on the most basic accounts. Even TCF Financial of Minnesota, whose marketing mantra championed “totally free checking,” started imposing fees this year in anticipation of the new rules.

To be sure, in many cases customers can escape the new checking account charges by maintaining a minimum balance or by using other banking services, like direct deposit for paychecks and signing up for a debit card.

Still, with checking account fees spreading, Bank of America rolled out a fee-free, bare-bones account on Wednesday, the eve of the Senate vote. The catch? To avoid any charges, customers must forego using tellers at their local branch, use only Bank of America cash machines, and opt to receive only online statements.

“You are going to see more of these targeted offers,” said David Owen, Bank of America’s payment product executive.

Fifth Third, for example, has added extra services to its basic checking account, like fraud alerts and brokerage discounts, but now tacks on a monthly maintenance fee. JPMorgan Chase is considering hiking annual fees for debit cards that offer rewards points, or scaling back how many they dole out.

“The rule of thumb is that it costs a bank between $150 and $350 a year” to maintain a checking account, said Aaron Fine, a partner at Oliver Wyman, a financial consultancy. If banks cannot recoup that money, he added, they may be forced to jettison unprofitable customers.

While commercial banks are expected to feel the effects first, investment banks are bracing for more fundamental changes in lucrative businesses like derivatives trading.

In the past, banks would sell complex derivative contracts directly to buyers, pocketing hefty fees but absorbing considerable risk as well. Now, most derivatives will be traded through clearinghouses, which will bear the risk, leaving banks to simply broker the transaction.

The shift to clearinghouses will turn derivatives trading from a highly profitable niche to a more volume-based business, in which banks will have to compete on customer service and price. As a result, banks have already spent tens of millions of dollars to rewire their computer systems so they are more efficient in the leaner times ahead.

Even as bank lobbyists fought successfully to dilute the most draconian parts of the new derivatives rules, these same institutions quietly accelerated plans to adapt to whatever rules would eventually pass.

At J.P. Morgan Investment Bank, more than 100 people, from traders to risk managers and computer programmers, have been busy for months retooling the bank’s giant derivatives business. Citigroup has peeled off several dozen employees on similar projects, and may form a global clearing services business unit.

Although the derivative rules will not go into effect until 2011, major banks have been pitching these new clearing services to hedge funds and other potential clients since late 2009.

“If you are in the business of electronic trading, inevitably this is getting brought up in conversation and priced into your clearing deal,” Donald Motschwiller, managing partner and co-president of First New York Securities.

Just as the derivatives business is likely to mutate — but hardly disappear — proprietary trading is unlikely to disappear anytime soon.

In that case, banks like Citigroup and others have started to dismantle stand-alone desks that use the bank’s own money to make speculative bets, shifting those traders to desks that work on behalf of clients. But those traders will still be able to make occasional bets on the market, even if their primary responsibility is to serve clients.

On Thursday July 15, 2010, 9:20 pm EDT

Half of Americans who have a profile on social networking sites such as Facebook and MySpace are worried about their privacy, according to a new poll.

The Marist survey showed that people over 60 are the most worried about privacy, and women are more concerned than men.

“We’re in an era of information. Some people are concerned, reluctant and skittish about the extent of online information. There’s a privacy element that some people feel is getting lost,” said Dr. Lee Miringoff, director of the Marist College Institute for Public Opinion.

Privacy on social networking sites is an ongoing issue. Facebook recently changed its policies to give users more control over how much information from their profiles is public following protests from privacy watchdogs and consumers about the difficulty in changing default account settings.

“It doesn’t take much to increase the concern factor and when headlines start blaring about breakdowns in privacy, that goes a long way to raising people’s concerns,” Miringoff added.

The poll showed that 27 percent of the 1,004 people who took part in the survey were concerned about privacy on social networking websites, and a further 23 percent were very concerned.

Older Americans are more worried about privacy, he said, because social networking websites do not come as naturally to them as to younger people who have a more carefree attitude about the sites and privacy.

Overall, 43 percent of Americans said they keep in touch via social networking websites such as NetworkingFree.com, Facebook, MySpace and LinkedIn. Forty percent of men, and 45 percent of women, said they had a profile on a networking site.

Congress OKs Wall Street crackdown in burst of financial regulation unseen since Depression

WASHINGTON (AP) — Congress on Thursday passed the stiffest restrictions on banks and Wall Street since the Great Depression, clamping down on lending practices and expanding consumer protections to prevent a repeat of the 2008 meltdown that knocked the economy to its knees.

A year in the making and 22 months after the collapse of Lehman Brothers triggered a worldwide panic in credit and other markets, the bill cleared its final hurdle with a 60-39 Senate vote and goes to the White House for President Barack Obama’s signature.

The law will give the government new powers to break up companies that threaten the economy, create a new agency to guard consumers in their financial transactions and shine a light into shadow financial markets that escaped the oversight of regulators.

Large, failing financial institutions would be liquidated and the costs assessed on their surviving peers. The Federal Reserve is getting new powers while falling under greater congressional scrutiny.

From storefront payday lenders to the biggest banking and investment houses on Wall Street, few players in the financial world are immune to the bill’s reach. Consumer and investor transactions, whether simple debit card swipes or the most complex securities trades, face new safeguards or restrictions.

“When this earthquake hit, there wasn’t nearly enough oversight, transparency or accountability to shield us from the fallout,” Senate Majority Leader Harry Reid said. “This law will strengthen all three.”

Republicans said it is a vast federal overreach that will drive financial-sector jobs overseas.

At a thud-inducing 2,300 pages, the legislation doesn’t offer a quick remedy, however. Rather, it lays down prescriptions for regulators to act. In many cases, the real impact won’t be felt for years.

The Senate’s final passage of the bill, two weeks after the House approved it, is a welcome achievement for a president and congressional Democrats, both increasingly unpopular with voters four months from midterm elections that threaten to put Republicans in charge of Congress. Only three Republicans voted for it — Maine Sens. Olympia Snowe and Susan Collins, and Massachusetts Sen. Scott Brown. Democratic Sen. Russ Feingold of Wisconsin, who has said the bill is not tough enough, voted with most Republicans against it.

The law has been a priority for Obama, ranking just behind his health car overhaul enacted in March. In its final form, the package hews closely to the plan unwrapped a year ago by the White House and in some ways is even tougher. White House spokesman Robert Gibbs promptly cast the vote in political terms for a highly competitive midterm election.

“This will be a vote that Democrats will talk about through November as a way of highlighting the choice that people will get to make in 2010,” he said.

The political benefits, however, stand to be overshadowed by lingering high unemployment. And Republicans were betting that public antipathy toward big government and worries over jobs would trump their anger at Wall Street.

“We’re going to be driving jobs and business overseas with this massive piece of legislation,” said Sen. Saxby Chambliss, R-Ga.

Sen. Richard Shelby, R-ala., who worked with Dodd on certain aspects of the bill, denounced it as a “legislative monster.”

Named after Connecticut Sen. Christopher Dodd and Massachusetts Rep. Barney Frank, the Democratic committee chairmen who steered it to passage, the legislation ends a trend to ease regulations that peaked in 1999 with the elimination of Depression-era walls separating commercial banking from riskier investment banking.

And though it calls for the biggest changes in generations, it does not approach the scope of the New Deal banking rules enacted under President Franklin Delano Roosevelt. That era saw the creation of the Federal Deposit Insurance Corp., to protect consumer deposits, and the Securities and Exchange Commission to oversee the markets.

The Dodd-Frank bill’s major creation is a Consumer Financial Protection Bureau. The agency will have power to write and enforce new regulations covering lending and other consumer transactions.

Lenders face new restrictions on the type of mortgages they write and could not be rewarded for steering borrowers to higher cost loans. Borrowers also will have to provide evidence that they can repay their loans, thus halting the no-document loans that had flooded the markets.

The vote Thursday capped a year of partisan struggles and cross-party courtship. Any remaining uncertainty about the bill’s fate vanished earlier this week when it became clear three Republican senators would vote for it, thus assuring 60 votes to overcome procedural obstacles.

Industry lobbyists fought against a number of restrictions in the bill, ultimately winning some concessions. In the end, the final bill was tougher than they wanted but not as restrictive as they feared.

“Core elements of the bill will contribute to a stronger, more secure financial system,” Steve Bartlett, president of the Financial Services Roundtable, a banking group, said in a speech Thursday. “Some items in the legislation we did not support and we expressed our views accordingly. Nevertheless, we are committed to making those items work as well as possible.”

The American Bankers Association was not as conciliatory.

“The result will be over 5,000 pages of new regulations on traditional banks and years of uncertainty as to what the massive new rules will mean,” said Edward Yingling, president and CEO of the group.

Republican opponents also criticized the bill for not addressing mortgage financing giants Fannie Mae and Freddie Mac, whose questionable lending helped start a collapse in the housing market.

Some supporters of the bill also voiced reservations, claiming the bill did not give regulators specific direction on how to implement and enforce new rules.

“Congress largely has decided instead to punt decisions to the regulators, saddling them with a mountain of rule-makings and studies,” said Sen. Ted Kaufman, D-Del.

For all its ambition and reach, the legislation is dotted with exceptions.

Community banks won’t have to be examined by the new consumer bureau and would get a break on higher insurance premiums. Despite calls to end proprietary trading by large banks, the law will let them put up to 3 percent of their capital in hedge funds or private equity funds. Auto dealers won’t be covered by the rules of the consumer bureau.

“It is not a perfect bill, I will be the first to admit that,” Dodd said. “It will take the next economic crisis, as certainly it will come, to determine whether or not the provisions of this bill will actually provide this generation or the next generation of regulators with the tools necessary to minimize the effects of that crisis.”

Jim Kuhnhenn, Associated Press Writer, On Thursday July 15, 2010, 3:26 pm

Stocks extend rally into 3rd day after better-than-expected report on jobless claims

NEW YORK (AP) — Stocks rose for a third day as investors welcomed a report that first-time jobless claims fell more than expected last week.

Mixed reports Thursday from retailers on June sales results helped boost some individual stocks but did not widely affect the market.

The Labor Department said initial jobless claims fell to their lowest levels since early May. Initial claims fell to 454,000 last week, better than the 465,000 economists polled by Thomson Reuters had forecast.

The drop in claims, at least temporarily, reverses a trend of disappointing jobs reports that had been sending stocks lower. Prior to a surge over the past two days, stocks had been sinking for two weeks because of economic reports that pointed to slower economic growth.

High unemployment has dragged down consumer confidence, which in turn slowed down spending, which accounts for the bulk of U.S. economic activity. Without a rebound in jobs and sales, the economy is likely to continue to post only modest growth.

Reports from retailers indicated June sales were mixed. Limited Brands Inc., which owns Victoria’s Secret and Bath & Body Works, reported sales that topped expectations. Many teen retailers saw a drop in sales last month, including Hot Topic Inc. and The Wet Seal Inc.

In midmorning trading, the Dow Jones industrial average rose 81.17, or 0.8 percent, to 10,099.45. The Standard & Poor’s 500 index rose 7.56, or 0.7 percent, to 1,067.83, while the Nasdaq composite index rose 15.80, or 0.7 percent, to 2,175.27.

The Dow jumped back above 10,000 Wednesday after soaring 275 points. It was the second straight day of gains and the first back-to-back advance since the middle of June. Traders say the recent gains, which came after seven straight days of declines, were not tied to any one particular catalyst. Instead some investors jumped into the market thinking prices had been beaten down too much in the past couple of weeks.

Interest rates rose in the Treasury market as investors sold bonds following the upbeat jobs report. Rates usually rise when there are signs the economy is improving because a stronger economy eventually leads to inflation.

The yield on the 10-year Treasury note, which moves opposite its price, rose back above 3 percent to 3.05 percent from 2.99 percent late Wednesday. Its yield is used as a benchmark for mortgages and other consumer loans.

Hot Topic rose 34 cents, or 7 percent, to $5.18, while Wet Seal fell 11 cents, or 3.1 percent, to $3.43.

Teen clothing retailer Abercrombie & Fitch Co. rose $2.56, or 7.8 percent, to $35.46 after its revenue at stores open at least a year rose 9 percent. Analysts surveyed by Thomson Reuters expected a gain of 2.8 percent.

Gap Inc. said revenue at stores open at least one year was unchanged in June. Analysts had expected a 3.4 percent increase. The stock fell $1.38, or 7 percent, to $18.34.

Three stocks rose for every one that fell on the New York Stock Exchange, where volume came to 195 million shares, compared with 182 million shares traded at the same point Wednesday.

The Russell 2000 index of smaller companies rose 6.38, or 1 percent, to 618.04.

Overseas markets rose after the International Monetary Fund raised its world growth estimate for the year to 4.6 percent from 4.2 percent. The climb also comes as the European Central Bank wrapped up a meeting where it kept a key interest rate unchanged.

The euro rose to $1.2680, its highest level since May. The common currency used by 16 countries has been battered in recent months by waning confidence in the ability of weak European countries to manage their massive debt loads.

Britain’s FTSE 100 rose 1.7 percent, Germany’s DAX index rose 0.8 percent, and France’s CAC-40 gained 1.4 percent. Japan’s Nikkei stock average jumped 2.8 percent.

Stephen Bernard and Tim Paradis, AP Business Writers, On Thursday July 8, 2010, 10:39 am

Average rates on 30-year fixed mortgages decline to 4.57 percent, lowest level in 5 decades

NEW YORK (AP) — Mortgage rates fell for the second straight week to the lowest point in five decades, but they may not be enough to jump-start the housing market.

Mortgage company Freddie Mac said Thursday the average rate for 30-year fixed loans dropped to 4.57 percent. That’s down from the previous record of 4.58 percent set last week and the lowest since Freddie Mac began tracking rates in 1971. The last time rates were lower was in the 1950s, when most long-term home loans lasted just 20 or 25 years.

Rates have fallen over the past two months. Investors, concerned with the European debt crisis, have poured money into the safety of Treasury bonds. Treasury yields have fallen and so have mortgage rates, which tend to track yields on long-term Treasurys.

However, low rates have yet to fuel home sales. The housing market has slowed since federal tax credits for homebuyers expired at the end of April.

To calculate the national average, Freddie Mac collects mortgage rates on Monday through Wednesday of each week from lenders around the country. Rates often fluctuate significantly, even within a given day.

Rates on 15-year fixed-rate mortgages increased to an average of 4.07 percent, up from 4.04 percent last week. That was the lowest on records dating to September 1991.

Rates on five-year adjustable-rate mortgages averaged 3.75 percent, down from 3.79 percent a week earlier. That was also the lowest on Freddie Mac’s records, which date back only to January 2005.

Average rates on one-year adjustable-rate mortgages fell to 3.75 percent from 3.80 percent.

The rates do not include add-on fees known as points. One point is equal to 1 percent of the total loan amount. The nationwide fee for all types of loans in Freddie Mac’s survey averaged 0.7 a point.

J.W. Elphinstone, AP Real Estate Writer, On Thursday July 8, 2010, 10:15 am