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First-time buyers boost U.S. home sales; jobless claims rise

U.S. home resales surged in September after two straight months of declines as first-time buyers stepped into the market, pointing to underlying momentum in the economy.

While other data on Thursday showed a bigger-than-expected increase in the number of Americans filing for unemployment benefits last week, the trend continued to suggest that the labor market remains strong. Labor market strength is one of the key factors underpinning the housing market.

The National Association of Realtors said existing home sales rose 3.2 percent to an annual rate of 5.47 million units. That was well above economists' expectations for an increase to a 5.35 million-unit pace.

Separately, the Labor Department said initial claims for state unemployment benefits increased 13,000 to a seasonally adjusted 260,000 for the week ended Oct. 15.

That marked 85 straight weeks of claims below the 300,000 threshold normally associated with a strong jobs market, the longest such period since 1970, when the labor market was much smaller. Economists had forecast first-time applications for jobless benefits rising to 250,000 in the latest week.

Fed's Dudley: No comments on monetary policy

Dollar hits seven-month high on ECB's Draghi, pressures oil, stocks

The euro fell to a four-month low against the U.S. dollar on Thursday and the greenback rose to its highest in seven months against a basket of major currencies after the European Central Bank President left the door open to more monetary stimulus.

The rise in the U.S. dollar knocked down oil prices which are traded in dollars and pressured U.S. stock prices.

The euro fell as low as $1.0916 versus the U.S. dollar, its lowest since June 24, helping the dollar index rise to its highest since March 10.

Draghi Signals ECB Unlikely to Stop QE Plan Without Tapering

Mario Draghi signaled the European Central Bank probably won’t stop its quantitative-easing program without tapering it first, indicating that the stimulus is likely to run past the currently scheduled end-date of March 2017.

“An abrupt ending to bond purchases, I think, is unlikely,” the ECB president said in a press conference in Frankfurt on Thursday. A sudden stop “is not present in anybody’s mind.”

The comments keep the central bank on track for a potential extension of its bond-buying program, as predicted by economists. Draghi said the Governing Council didn’t discuss prolonging or tapering in this policy meeting, while noting that the publication of fresh economic forecasts in December, as well as the results of internal studies on options to avoid running into bond shortages, will help the decision then.

Oil down 2 percent, strong dollar knocks U.S. crude off 15-month highs

Oil prices settled down more than 2 percent on Thursday, as a resurgent dollar encouraged players to take profit on the previous day's rally that sent U.S. crude to 15-month highs.

The dollar hit seven-month highs against a basket of currencies .DXY and a three-month peak versus the euro EUR= after the European Central Bank kept interest rates unchanged and U.S. data showed home resales surged in September.

Benchmark Brent crude for December delivery LCOc1 settled down $1.29, or 2.5 percent, at $51.38 per barrel.

U.S. West Texas Intermediate (WTI) crude's November contract CLc1, which expired as the front-month, fell $1.17, or 2.3 percent, to finish at $50.43. WTI's December contract CLc2, which will be front-month from Friday, slid $1.19 to settle at $50.63.