Given the market's dismal performance today -- the Dow Jones Industrial Average (INDEX: ^DJI ) is down by 217 points as of 2:50 p.m. EDT -- you may be surprised to hear that good news was released this morning. In fact, there wasn't just one piece of good news, but two!
The good news that no one cares about
The first concerned jobs. Jack Welch-inspired conspiracy theories aside, data released by the U.S. Department of Labor today offered more evidence that the national employment situation may be improving. According to the report, joblessness fell in 41 states last month, with the biggest declines seen in California, South Carolina, Hawaii, Louisiana, and Utah.
In Ohio, a key swing state in the upcoming presidential election, unemployment fell to 7% in September, down from 7.2% in August. And in Florida, while the jobless rate stayed the same, hiring has grown at a rate five times faster than Florida's expanding labor force.
The second report involved a more nuanced take on the housing market. Data released today by the National Association of Realtors showed that while existing-home sales fell by 1.7% sequentially last month, both the price and inventory of available houses took strides in the right direction.
With respect to prices, existing-home sale prices grew 11.3% relative to September of 2011. And with respect to the inventory, the number of listed homes is 20% below last year's level. According to the NAR's chief economist, Lawrence Yun, "The shrinking housing supply is supporting ongoing price growth, a pattern that could accelerate unless homebuilders robustly ramp up production."
Earnings drive Dow lower
Despite these positive economic signals, the Dow is nevertheless being trudged downward on the back of disappointing earnings reports from a string of blue-chip companies. Yesterday, technology giants Google (Nasdaq: GOOG ) and Microsoft (Nasdaq: MSFT ) announced earnings that fell short of analyst estimates. McDonald's (NYSE: MCD ) and General Electric (NYSE: GE ) followed suit today with similarly disappointing performances.
Companies across the board are noting two disturbing trends. First, volatility in the currency market -- particularly a dollar strengthening relative to the euro -- is driving down both revenue and earnings at companies that operate in multiple geographic markets. In General Electric's case, for instance, its revenue growth rate would have been twice as high without foreign-exchange headwinds.
And second, there's a clear lag of demand on the part of consumers. Even McDonald's new value menu, featuring a variety of items priced at $1, isn't enough to help buoy its results; the company noted that same-store sales are trending lower in October for the first time in a decade.
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