Bloggy Business Today

By Ryan Vlastelica

NEW YORK |
Fri Feb 3, 2012 10:31am EST

NEW YORK (Reuters) – Stocks rallied more than 1 percent on Friday, extending a rally in equities, after a report showed U.S. job growth surged in January.

Nonfarm payrolls jumped by 243,000 in January, the Labor Department said, the most since April and far exceeding forecasts. The unemployment rate dropped to a near three-year low of 8.3 percent.

“People have been underestimating the economic recovery and the expansion we’re going through,” said Brad Sorensen, director of market and sector analysis at Charles Schwab in Denver. “This report was really solid and continues a string of solid numbers. Things are better than people have expected.”

In another upbeat report, the pace of growth in the services sector unexpectedly accelerated in January to its highest level in nearly a year.

The steady stream of positive reports has helped fuel a rally in stocks. The SP 500 is up more than 6 percent so far this year and almost 25 percent since an October low.

“We’re starting to get extended in the near term, so it wouldn’t be surprising to get a little bit of a pullback soon,” Sorensen said, adding that he would use it to add to positions.

The Dow Jones industrial average .DJI jumped 163.52 points, or 1.29 percent, at 12,868.93. The Standard Poor’s 500 Index .SPX was up 17.17 points, or 1.30 percent, at 1,342.71. The Nasdaq Composite Index .IXIC rose 41.01 points, or 1.43 percent, at 2,900.69.

So far this week the SP is up 1.6 percent and on track for its fifth week of gains. The Dow has risen 1.2 percent and the Nasdaq, also set for a fifth straight winning week, is up 2.5 percent.

Tyson Foods Inc (TSN.N) rose 3.4 percent to $19.26 after quarterly earnings beat expectations.

Aon Corp (AON.N) also reported higher-than-expected profit that just beat estimates. Its shares fell 1.2 percent to $48.77.

Gilead Sciences Inc (GILD.O) climbed 10 percent to $54.39 a day after announcing promising early results from a trial of a hepatitis C drug. It also said adjusted fourth-quarter profit was below consensus.

Of the 283 SP 500 companies that have reported results thus far, 60 percent have posted results that beat expectations, a lower rate than in previous quarters.

Earnings this season have been mixed, with fewer companies beating expectations than in recent quarters. Many technology names, including Qualcomm Inc (QCOM.O) and Apple Inc (AAPL.O), have posted blowout quarters, contributing to the recent strength in the Nasdaq.

(Reporting by

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By Lucia Mutikani

WASHINGTON |
Fri Feb 3, 2012 9:25am EST

WASHINGTON (Reuters) – The economy created jobs at the fastest pace in nine months in January and the unemployment rate dropped to a near three-year low of 8.3 percent, providing some measure of comfort for President Barack Obama who faces re-election in November.

Nonfarm payrolls jumped 243,000, the Labor Department said on Friday, as factory jobs grew by the most in a year. The gain in overall employment was the largest since April and outpaced economists’ expectations for a rise of only 150,000.

The report pointed to underlying strength in the economy, despite expectations that growth will slow in the first quarter.

Economists had expected the jobless rate to hold steady at 8.5 percent. The rate is the lowest since February 2009 and has dropped 0.8 percentage point since August.

The decline last month reflected large gains in employment in the separate household survey from which the unemployment rate is derived.

“It’s certainly supportive of the U.S. recovery and suggests that momentum is gathering pace,” said Brian Dolan, chief market strategist at FOREX.com in Bedminster, New York.

U.S. Treasury debt prices fell sharply on the report, while stock index futures surged. The dollar rose against the yen.

The continued labor market improvement could be a relief for Obama who faces a tough re-election.

The report contrasted with a glummer assessment of the economy’s prospects offered by the Federal Reserve last week and it could lessen chances of the central bank launching another round of asset purchases to spur a stronger recovery.

Chairman Ben Bernanke said the Fed was mulling further purchases to speed up the recovery. It has already bought $2.3 trillion in bonds to keep rates low and spur the economy.

“Certainly the Fed will welcome it but they remain worried about other areas of the economy, namely housing. This should not change its view on the economy,” said Andrew Wilkinson, chief economic strategist at Miller Tabak Co. in New York.

The U.S. central bank said it would probably hold interest rates near zero at least through 2014, citing still-high unemployment.

BROAD JOB GAINS

Job gains last month were widespread, with even the transportation and warehousing sector increasing payrolls.

The tenor of the report was further strengthened by revisions to November and December payrolls data, which showed 60,000 more jobs created than previously reported.

In addition, average hourly earnings rose four cents, which should help to support spending. The report suggested that expectations of a slowdown in U.S. economic growth in the first

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WASHINGTON |
Thu Feb 2, 2012 9:14am EST

WASHINGTON (Reuters) – New claims for unemployment benefits in the United States fell more than expected last week, pointing to more healing in the nation’s battered jobs market.

Initial claims for state unemployment benefits dropped 12,000 to a seasonally adjusted 367,000, the Labor Department said on Thursday.

Job growth has gained momentum in recent months and the unemployment rate dropped to a near three-year low of 8.5 percent in December.

Analysts will be watching Friday’s report on January payrolls for insight into what it will mean for policy after the Federal Reserve last week left the door open to additional economic stimulus.

“This is certainly a positive in front of non-farm payrolls and further supports the view that the U.S. economy is creating more jobs with the prospect for a lower unemployment rate,” said Michael Woolfolk, a currency strategist at BNY Mellon in New York.

Analysts polled by Reuters before Thursday’s data expected the payrolls report would show the unemployment rate holding steady at 8.5 percent.

U.S. stock futures erased losses to turn positive after the data, while Treasury debt prices pared gains.

Economists polled by Reuters had forecast claims falling to 375,000. Claims have been lower than 400,000 for eight of the last 10 weeks, holding below a level associated with labor market healing.

The four-week moving average for initial claims, a trend measure that smooths out volatility, fell 2,000 to 375,750.

“It certainly suggests we will continue to see job growth at the higher end of the recent range (which has been between) 100,000 to 200,000,” said Christopher Low, an economist at FTN Financial in New York. “If claims continue to drop then we should see job growth stronger than that.”

The Federal Reserve last week acknowledged some improvement in the labor market, but said the jobless rate remained too high and that it would likely keep overnight lending rates near zero until at least late 2014.

Chairman Ben Bernanke, who is due to testify before lawmakers later on Thursday, has said the Fed was mulling further asset purchases to help foster stronger economic growth.

The number of people still receiving benefits under regular state programs after an initial week of aid fell 130,000 to 3.437 million in the week ended January 21, the lowest since September 2008.

Economists had forecast so-called continuing claims at 3.55 million.

The number of Americans on emergency unemployment benefits rose 100,392 to 3.022 million in the week ended January 14, the latest week for which data is available.

A total of

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NEW YORK |
Thu Feb 2, 2012 9:47am EST

NEW YORK (Reuters) – U.S. stocks opened higher on Thursday after jobless claims fell more than expected, boosting optimism about the upcoming government payrolls report.

The Dow Jones industrial average .DJI was up 8.94 points, or 0.07 percent, at 12,725.40. The Standard Poor’s 500 Index .SPX rose 1.98 points, or 0.15 percent, at 1,326.07. The Nasdaq Composite Index .IXIC added 5.72 points, or 0.20 percent, at 2,853.99.

(Reporting By Angela Moon; editing by Jeffrey Benkoe)

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NEW YORK |
Wed Feb 1, 2012 9:42am EST

NEW YORK (Reuters) – The pace of job creation by private employers slowed more than expected in January after a sharp gain the month before, a report by a payrolls processor showed on Wednesday.

The private sector added 170,000 jobs last month, the ADP National Employment Report showed, shy of economists’ expectations for a gain of 185,000 jobs.

It was the smallest gain in three months and inline with economists’ forecasts for private job gains in the more comprehensive labor market report on Friday.

ADP also revised down December’s private payrolls to an increase of 292,000 from the previously reported 325,000. The report is jointly developed with Macroeconomic Advisers LLC.

“The previous two months (ADP) has been well above consensus. With this month, we had a bit of disappointment. The ADP (number) kind of says it’s the right number for the Friday’s payroll report,” said John Canally, economist and investment strategist at LPL Financial in Boston.

U.S. stock index futures held on to gains immediately following the data.

Economists often refer to the ADP report to fine-tune their expectations for the payrolls numbers, though it is not always accurate in predicting the outcome.

The ADP figures have had a tendency to overshoot the government report lately. The ADP report has come in stronger than the private payrolls component of the nonfarm jobs report for three straight months, averaging a 62,000 overshoot in the fourth quarter of last year, according to Jonathan Basile, director of U.S. economics at Credit Suisse.

Friday’s report is expected to show the economy created 150,000 jobs, and a gain in private payrolls of 170,000, according to Reuters data.

Despite the expected increase, prospects for a third round of quantitative easing from the Federal Reserve remain good as long as unemployment stays above 8 percent, Michael Woolfolk, a senior currency strategist at BNY Mellon, wrote in a note.

The unemployment rate is expected to hold steady at 8.5 percent.

(Reporting By Leah Schnurr, additional reporting by Richard Leong; Editing by Teodore d’Afflisio)

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