The Dow Jones Industrial Average (DJINDICES:^DJI) is making big gains following some mixed reports on the economy. As of 1:20 p.m. EDT the Dow was up 134 points, or 0.88%, to 15,426. The S&P 500 (SNPINDEX:^GSPC) is up 1.01% to 1,669.

There were two U.S. economic releases today.





Initial unemployment claims

June 30 to July 6



Import price index




Source: MarketWatch U.S. Economic Calendar.

The unemployment claims report is the one to make note of. Unemployment claims rose this week by 16,000 to 360,000, well above analyst expectations of a rise to 349,000. The four-week moving average rose 6,000 to 351,750.

US Initial Claims for Unemployment Insurance Chart

US Initial Claims for Unemployment Insurance data by YCharts.

Nevertheless, unemployment claims are steadily trending below last year's average of 360,000 to 370,000 and are well below the levels of the past three years. The economy is improving, albeit slowly.

Investors would do well to remember that the economy is not the same as the market. Both are being supported by the Federal Reserve's low federal-funds rate, as well as its monthly purchases of $85 billion worth of long-term assets. Today the market has found encouragement in the minutes of the June meeting of the Federal Open Market Committee, released yesterday. The minutes showed that the Federal Reserve will continue its quantitative easing for the time being, spurring on the economy and the market. The question investors need to ask themselves is whether this information is priced into the level the market is trading for. Investors pay a high price when things are going well and everyone is excited. This week's American Association of Individual Investors sentiment survey showed that 49% of those surveyed are bullish, above the long-term average of 39%, while only 18% are bearish, below the long term average of 30%.

Today's Dow leader is Intel (NASDAQ:INTC), up 2.5%. Intel's stock got hit hard earlier in the week after it was downgraded by Evercore and Citigroup, who believe the chip maker will struggle as PC sales continue to weaken. PC sales experienced their worst quarterly drop in history in the first quarter of this year. This has been attributed to both the rise in mobile and consumers' discontent with Microsoft's new Windows 8 user experience. Intel is heavily dependent on the PC market, as its mobile offerings lag those of competitors in the field. While Intel is making major investments to catch up to the likes of ARM and Qualcomm, it remains to be seen who will win the race to dominate chip sales for the mobile market.

Dan Dzombak can be found on Twitter @DanDzombak or on his Facebook page, DanDzombak. He has no position in any stocks mentioned. The Motley Fool recommends Intel. The Motley Fool owns shares of Intel. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.