Stocks Stage Late-Session Comeback

Blue-chip stocks are bouncing back from this morning's losses after a drop in jobless claims led many to wonder whether the Federal Reserve will reduce its support for the economy. With roughly an hour left in the trading session, the Dow Jones Industrial Average (DJINDICES: ^DJI  ) is up a modest 20 points, or 0.13%.

The Department of Labor issued a report this morning showing that jobless claims fell last week to a seasonally adjusted rate of 346,000. That's 11,000 fewer than in the prior week and roughly in line with analyst expectations -- though, as I've noted before, investors should pay little heed to supposed experts' predictions about the future.

More importantly, as you can see in the chart below, the general trend is most certainly headed in the right direction. At the height of the financial crisis, a staggering 670,000 applications were being filed each week. That being said, we're nevertheless far from the level that's necessary to aggressively drive down unemployment.

In other news, financial stocks are generally lower today after Freddie Mac published the results of its Weekly Primary Mortgage Market Survey. According to the data, the average interest rate on a conventional 30-year fixed rate mortgage increased this week to 3.91%, up from 3.81% last week.

Shares of Bank of America (NYSE: BAC  ) and JPMorgan Chase (NYSE: JPM  ) , the Dow's only banking components, are oscillating between positive and negative territory on the news. While higher interest rates will fuel these institutions' net interest margins, investors fear they will weigh on mortgage-underwriting activity as fewer homeowners seek to refinance their loans. To be candid, I'm skeptical about the claim that the net result will necessarily be bad.

And finally, the central bank released its latest flow of funds data. Among other things, it showed that household wealth increased by $3 trillion in the first quarter to $70.3 trillion. As Bloomberg News pointed out, it was the first time the latter figure has eclipsed its pre-recession level as "gains in the stock and housing markets help Americans withstand an increase in the payroll tax this year."

In terms of individual stocks, shares of Verizon (NYSE: VZ  ) are the Dow's biggest winner, up by 3.1% at the time of writing. To those of you following the headlines, this may come as a shock. As my colleague Dan Dzombak discussed earlier, the U.K.-based Guardian published documents this morning showing that the National Security Agency is collecting the phone records of Verizon's business customers. But to Dan's point, Verizon's "strong position in the U.S. wireless market, as well as its 4.2% dividend yield" go a long way toward explaining investors' collective decision to ignore the news.

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