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Investments

Stocks up ahead of Friday’s jobs report

Redwood gets favorable nod from FBR Capital Markets

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The HW 30 and most of the indices finished Thursday higher, with the S&P 500 hitting its record for the 50th time in the past year. The Nasdaq was dragged down by declines in biotech companies.

As a whole, the HW 30 — HousingWire’s exclusive list of mortgage-related stocks — witnessed a strong day on the markets, gaining 596 to close at 1,130.92. The S&P climbed 0.17% to finish at 1,877.03, while the Nasdaq fell 5.85 points to close at 4,352.13. The Dow gained 61.7 points to close Thursday at 16,421.89.

Traders took Thursday’s jobless claim survey as a good sign for tomorrow’s key jobs data coming from the U.S. Census Bureau of Labor Statistics. The Redwood Trust (RWT) saw a 0.05 drop to finish out at $36.59 on a day when FBR Capital Markets issued a favorable outlook for the company.

“We continue to believe Redwood Trust, Inc. is positioned well for the long term, but remain on the sidelines as we believe 2014 could prove to be yet another transitional year as the company bides its time waiting for its conduit to consistently be able to purchase and securitize jumbo mortgages in a profitable manner,” the report to clients states. “We expect 1Q14 to be a quarter relatively consistent with 4Q13, in which the company has limited opportunities for securitizations and loan purchases with momentum picking up into the back half of the year.

“That said, we reiterate our Market Perform rating and $18 price target on the shares as we believe near-term opportunities will leave earnings and returns range-bound in the short to medium term. We are adjusting our 2014 EPS estimate to $1.70 from $1.85 and establishing a 2015 EPS estimate of $2.00,” the report concluded.

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