Cyprus Mail
Business

Jobs data lifts Wall St after string of losses

New York Stock Exchange U.S. stocks rose yesterday after a stronger-than-expected payrolls report gave traders confidence that the economy could be healthy enough to withstand a scaling back of the Federal Reserve’s stimulus.

The jobs-driven rally gave the S&P 500 its best day in nearly a month. But the broad index was still on track to post its first negative week in nine after falling in the previous five sessions.

Nonfarm payrolls added 203,000 in November, exceeding the forecast, and the U.S. unemployment rate fell to a five-year low of 7.0 per cent. The Labour Department’s report raised the prospects that the Fed would begin to taper its stimulus programme sooner rather than later.

Economic data for the fourth quarter so far has been mixed, with labour market and consumer spending indicators firming while the housing market and business spending have slowed.

“The economy is still not generating the levels of inflation the Fed would like to see, so that may give them a little space to maneuver,” said Cam Albright, director of asset allocation at Wilmington Trust Investment Advisors, in Wilmington, Delaware.

“I don’t think (the payrolls data) backs the Fed into the corner that they have to taper in December.”

Many market participants have expected the Fed to announce a cut in stimulus in March. The Fed has said it would slow its massive bond purchases when certain economic measures meet its targets, including a drop in the U.S. unemployment rate.

The Dow Jones industrial average rose 153.27 points or 0.97 per cent, to 15,974.78. The S&P 500 gained 17.16 points or 0.96 per cent, to 1,802.19. The Nasdaq Composite added 32.40 points or 0.80 per cent, to 4,065.57.

After an eight-week run that pushed the S&P 500 up nearly 7 per cent, the benchmark index had dropped 1.2 per cent over the past five sessions, its longest losing streak since late September.

Intel ranked among the S&P 500’s top points gainers, with its shares up 2.8 per cent at $24.94 after Citigroup raised its rating on the chipmaker’s stock to “buy” from “neutral.”

J.C. Penney shares fell 6 per cent to $8.32 after the department store chain said it received a letter of inquiry from the U.S. Securities and Exchange Commission, seeking an explanation on the company’s financial position. Barnes & Noble also disclosed an SEC investigation, and its stock fell 5.4 per cent to $15.50.

Other data showed personal spending rose 0.3 per cent in October, slightly higher than expected. The Thomson Reuters/University of Michigan’s preliminary reading on the overall index on consumer sentiment jumped to 82.5 for December from a final November reading of 75.1.

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