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Thursday Market Note: Jobless Claims, Durable Goods Fall

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Stocks were lower in Asia and Europe, after a lackluster session in the U.S. Another dismal housing report and the Fed's decision to leave rates unchanged failed to inspire the bears yesterday, but sellers are emerging in the U.S. futures markets, pointing to a lower opening.

On the heels of horrible existing and new home sales, Fannie Mae announced that it would penalize homeowners who walk away from their mortgage obligations. The trend of "strategic defaults," where a homeowner can afford to repay his obligation, but chooses not to do so, will now come with a penalty: no shot at a Fannie Mae-backed mortgage for seven years from the date of foreclosure. Separately, many critics contend that Fannie Mae and Freddie Mac contributed to the nation's housing and credit crisis.

Weekly jobless claims fell by 19,000 to 457,000 last week from a revised 476,000. The 4-week moving average, inched lower to 462,750 from 464,250 the prior week. The number of people continuing to receive jobless benefits decreased by 45,000 in the week ended June 12 to 4.55 million.

Separately, durable goods (goods meant to last at least three years) for May fell 1.1 percent. Excluding transportation, orders rose 0.9 percent, the third increase in four months, indicating continued improvement in manufacturing.

Regulatory reform negotiations are bumping up against today's self-imposed deadline. Yesterday, lawmakers carved out an exemption for auto dealers from oversight by the soon-to-be created Consumer Financial Protection Agency. Additionally, Washington was happy to prevent financial professionals from putting their clients' interest first (the fiduciary duty)--a big loss for ordinary investors.

Today's topic: the thorny issue of derivatives.


Jill Schlesinger is the Editor-at-Large for CBS Prior to the launch of MoneyWatch, she was the Chief Investment Officer for an independent investment advisory firm. In her infancy, she was an options trader on the Commodities Exchange of New York.