Dow Waffles as Investors Assess New Data

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As the market pauses to assess the newest economic data, the Dow Jones Industrial Average (DJINDICES: ^DJI  ) is hovering just above the break-even point. With new jobs data out today, more speculation on the Fed's next move with its stimulus policy is sure to drive some of the remaining trades today. Just before 11:15 a.m. EDT, the index is up 0.12%.

In the news
The latest jobless claims report showed that new applications for unemployment fell by 11,000 compared to last week. The fall to a seasonally adjusted rate of 346,000 is in line with economists' expectations. This falls in line with the Challenger Job Cuts report released this morning, which showed that cuts have declined for the third month in a row. The combined data gives the impression of an improving labor market, which is the goal of the Fed stimulus plan.

But without new hiring, there is little support for the Fed to cut back its current rate of bond repurchases. Though the improvements in job cuts and fewer unemployment claims does give credence to the improvement of the labor market, it only shows that business are keeping the employees they have, not bringing in new ones. A pickup in hiring is the sign that the Fed will need to support the true improvements in the labor market.

Inside the Dow
Banks are having a brighter day today after steady declines earlier in the week. Bank of America (NYSE: BAC  ) is up 0.73% this morning, though it continues to battle in court. With an $8.5 billion settlement on the line, the bank has brought new information to the hearing that will decide if the settlement is approved. With high-profile objectors like American International Group (NYSE: AIG  ) stating that the settlement amount is too low, the bank must fight to avoid a potential $60 billion price tag. B of A just disclosed in the court that it had permission to take Countrywide into bankruptcy, but instead offered the settlement to investors. The new information makes the current settlement price look appealing to most, but AIG still argues that the sweetheart deal was not enough to accept.

JPMorgan (NYSE: JPM  ) is enjoying a small boost this morning, with a 0.23% gain in trading. After settling some old debts, the bank is moving forward. CEO Jamie Dimon spoke yesterday in China at the Fortune Global Forum saying that returning to a normal interest rate environment will be scary but normalized rates are a good thing. Addressing the concerns of many investors, Dimon's comments may have sparked some increased investor confidence in his ability to steer JPM though the volatile times ahead.

American Express (NYSE: AXP  ) is leading the financials this morning with a 0.99% gain. Though there is relatively little news from the company, continued improvements in consumer spending may be bolstering its share price. As new data is released about consumer spending, the trend has been that higher-income households are more confident in the market and are spending more. Since American Express has historically been a high-wealth-aimed financial business, this bodes well for the company's revenue growth.

Bank of America's stock doubled in 2012. Is there more yet to come? With significant challenges still ahead, it's critical to have a solid understanding of this megabank before adding it to your portfolio. In The Motley Fool's premium research report on B of A, analysts Anand Chokkavelu, CFA, and Matt Koppenheffer, Financials bureau chief, lift the veil on the bank's operations, including detailing three reasons to buy and three reasons to sell. Click here now to claim your copy.

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