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S&P Win Streak Longest Since 2004 as Stocks Keep Rising

The Standard and Poor’s Index rose 8.14 points Friday, continuing its longest winning streak since 2004 and capping a week of generally good news for the U.S. economy.

The S&P Index finished at 1502.96, the first time it has finished above 1500 since Dec. 12, 2007. It is the fourth straight positive week for the S&P, which has more than doubled from the March 2009 low of 676.53.

The Dow Jones also had a good day, gaining 70.65 points to finish at 13,895.98, and the NASDAQ gained 19.33 points to finish at 3,149.71.

“The stock market is always a forward-looking gauge of the economy, so this is good news,” Sean Snaith, director of the University of Central Florida’s Institute for Economic Competitiveness, told “It tells us that the market has more than recovered from the low points of the financial crisis, but I don’t know if we’re making significant enough strides with unemployment.”

More Positive Signs

The other news this week fed the optimism on Wall Street. Jobless claims for December inched down to a five-year low, home sales dipped slightly in December, but 2012 still produced the biggest sales jump in 14 years, and mortgage rates remained near record lows.

The jobless claims were down 1.3 percent, which means fewer layoffs in important areas like construction, manufacturing and transportation. There were 330,000 jobless claims for the week ending Jan. 19, 5,000 fewer than the previous week. That is less than half the number recorded during the peak week of March 28, 2009, when there were 667,000 claims.

The four-week moving average for jobless claims was 351,750, a 2.3 percent decrease and well below the 400,000 cutoff point that analysts consider the sign of an improving market. Overall, the unemployment rate remained steady at 7.8 percent, with 155,000 new jobs added in December. Analysts say that unemployment needs to be around 6.0 percent for there to be a strong surge in the economy.

“The overall job recovery is very slow,” Benjamin Balak, an associate professor of economics at Rollins College, told “The stock market’s success indicates that the wealthy and corporations are doing great, but they aren’t creating nearly enough jobs.”

Home Sales Down Slightly

The dip in home sales was unexpected after a robust month of November, when 398,000 homes were sold. December’s total of 369,000 was a drop of 7.3 percent.

However, combined sales of new and previously owned properties rose 9.9 percent in 2012. That is the biggest annual gain since 1998 and shows the housing market is helping drive growth in the economy.

The median price for existing homes was up 6.3 percent last year, the biggest gain since 2005. The construction industry added 30,000 jobs in December, its highest total in 15 months.

“The housing market is coming back, gaining momentum, and it’s one of the bright spots for the economy as we start 2013,” Robert Dye, chief economist at Comerica Inc. in Dallas, told Bloomberg News.

Record low mortgage rates are at least part of the reason for the home buying. The average rate on 30-year fixed loans was 3.42 percent this week, a slight increase from 3.38 last week. The 15-year rate rose from 2.66 to 2.71.

The average rate for 2012 – 3.66 percent – was the lowest in 65 years.

“Overall, I’d say these are positive signals, but it’s not like they’re knocking my socks off,” Snaith said. “Unemployment is still 7.8 percent, and under-employment is probably much higher than that. The progress on the jobs front is not as rapid as we’d all like.”

Bill “No Pay” Fay has lived a meager financial existence his entire life. He started writing/bragging about it in 2012, helping birth into existence as the site’s original “Frugal Man.” Prior to that, he spent more than 30 years covering the high finance world of college and professional sports for major publications, including the Associated Press, New York Times and Sports Illustrated. His interest in sports has waned some, but he is as passionate as ever about not reaching for his wallet. Bill can be reached at [email protected].

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