- Title: USA: July jobs data lift stock indexes more than one percent
- Date: 8th August 2009
- Summary: NEW YORK CITY, NEW YORK, UNITED STATES (AUGUST 7, 2009) (REUTERS) (SOUNDBITE) (English) JOHN EADE, DIRECTOR OF RESEARCH, ARGUS RESEARCH "I think there is going to be a real strong link between corporate profit growth and job creation. We just wrapped up the second quarter, earnings are going to be down something like 30 percent year over year. Not a lot of hiring when earnings are down 30 percent. Third quarter, we think earnings are going to be flat, I think managers are going to start considering hiring people. In the fourth quarter, we're looking for a sharp growth in profits, and then growth in 2010, of about 24 percent in profits. I think once that profit growth resumes, companies are going to start hiring again."
- Embargoed: 23rd August 2009 13:00
- Keywords:
- Location: Usa
- Country: USA
- Topics: Economic News
- Reuters ID: LVA2HX8RSOXZAMKMJLR9IH7G70OM
- Story Text: U.S. stocks rallied on Friday (August 7), pushing the Standard & Poor's 500 to a 10-month high as the July jobs report was less bleak than feared and underpinned hopes the economy was on track for recovery.
The data boosted stocks across the board, but especially consumer-dependent retailers, and all three major U.S. stock indexes wrapped up a fourth week of gains. An S&P retail index .RLX gained 3.6 percent.
The economy's improving outlook also buoyed financials, with the S&P financial index .GSPF up 2.7 percent. JPMorgan Chase & Co climbed 4 percent to 42.36 dollars (USD) and ranked among the stocks contributing the most to the Dow's gain.
Before the opening bell, government data showed the U.S. unemployment rate fell in July for the first time in 15 months as employers cut fewer-than-expected jobs.
Adding to the positive tone, insurer American International Group Inc posted its first quarterly profit in seven quarters, and its stock surged 20.5 percent to 27.14 dollars (USD).
For the day, the Dow Jones industrial average was up 113.81 points, or 1.23 percent, at 9,370.07. The Standard & Poor's 500 Index .SPX was up 13.40 points, or 1.34 percent, at 1,010.48. The Nasdaq Composite Index was up 27.09 points, or 1.37 percent, at 2,000.25.
For the week, the Dow was up 2.2 percent, the S&P 500 was up 2.3 percent and the Nasdaq was up 1.1 percent.
The S&P 500 is now up about 50 percent from its 12-year closing low in early March, helped by stronger-than-expected corporate earnings and a string of economic data that has suggested a recovery.
This morning, the Labor Department said U.S. employers cut 247,000 non-farm jobs in July -- far less than the 320,000 expected and the smallest decline in a year.
The U.S. unemployment rate slipped to 9.4 percent in July from 9.5 percent in June.
"I think there is going to be a real strong link between corporate profit growth and job creation. We just wrapped up the second quarter, earnings are going to be down something like 30 percent year over year. Not a lot of hiring when earnings are down 30 percent. Third quarter, we think earnings are going to be flat, I think managers are going to start considering hiring people. In the fourth quarter, we're looking for a sharp growth in profits, and then growth in 2010, of about 24 percent in profits. I think once that profit growth resumes, companies are going to start hiring again," said John Eade, Director of Research, Argus Research.
About 73 percent of the S&P 500 companies so far have beaten analysts' earnings expectations, according to Thomson Reuters data.
Among Friday's earnings, AIG's stronger-than-expected results reassured investors that the embattled insurer, rescued by U.S. taxpayers during the financial crisis, was showing signs of life. At Thursday's close, the stock was up nearly 70 percent since the beginning of the week.
Volume was about average on the New York Stock Exchange, with 1.47 billion shares changing hands, versus last year's estimated daily average of 1.49 billion, while on the Nasdaq, about 2.46 billion shares traded, above last year's daily average of 2.28 billion.
Advancing stocks outnumbered declining ones on the NYSE by a ratio of 4 to 1, while on the Nasdaq, more than nine stocks rose for every four that fell. - Copyright Holder: REUTERS
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