Lowest Jobless Claims Since Jan. 2008 Send Stocks Higher

Blue-chip stocks are higher today on the heels of better-than-expected jobless claims. With roughly an hour remaining in the trading session, the Dow Jones Industrial Average (DJINDICES: ^DJI  ) is up by 32 points, or 0.21%.

The Labor Department released data today showing that the number of people filing for unemployment benefits fell last week to the lowest level in more than five years. For the week ended May 4, a total of 323,000 people filed jobless claims after adjusting for seasonal variations in the figure. This represented a decrease of 4,000 applications on a sequential basis, and it puts the figure at pre-recession levels. The last time a comparable number of claims was reported was in January of 2008. 

This is not to suggest that the employment situation is fixed by any stretch of the imagination. Last week, the Labor Department released its official unemployment rate for the month of April. The figure came in at 7.5%, well above the levels that were seen prior to 2008. Nevertheless, as a JPMorgan Chase economist told The Wall Street Journal, "Today's report validates the signal from last week's payroll report that the jobs market has remained resilient in the second quarter.

In terms of individual stocks, shares of 3M  (NYSE: MMM  ) are leading the Dow higher, up 1.9% at the time of writing. Absent a specific impetus, it appears as if the industrial conglomerate is merely riding higher on the upbeat jobs report. Lately, as my colleague Jessica Alling noted earlier today, 3M has been working on a new line of masking tape "designed and labeled to help purchasers with the task of figuring out what strength of tape they need to get the job done." For the year, 3M's shares are up an impressive 14%, and they yield a not-too-shabby 2.4%.

Alternatively, the worst performing stock on the blue-chip index is AT&T (NYSE: T  ) , down by 1.2% in mid-afternoon trading. The company announced today that it's launching a new prepaid service aimed at customers "interested in a first-class wireless experience at a value price, without an annual contract." While an AT&T spokeswoman told the Journal that the move isn't in response to T-Mobile's recent deal to sell iPhones without a service contract, the timing appears to be far from a coincidence. That its stock is lower today is likely a reflection of the fact that prepaid cellular service is often less profitable than service provided under a monthly contract.

Is this company a buy right now?
With over 50,000 products, 3M plays a role in making everything from computers to power cables. A long history of invention and innovation has driven the company to its wide reach, but a focus on operational efficiency may be hurting the creative culture that once created Scotch Tape and the Post-it note. A new leader has taken over and vows to return innovation to the forefront. Does this mean the stock will become more than a dividend, returning to its former glory as a growth stock once again? Find out whether 3M has what it takes to pull it off in The Motley Fool's comprehensive new research report on the company. Simply click here now to claim your copy today.


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