IBJNews

Stocks gain after encouraging U.S. hiring news

Back to TopCommentsE-mailPrintBookmark and Share

Encouraging news about the U.S. jobs market trumped rising oil prices and worrying developments in Europe's simmering debt crisis on Wednesday.

Oil climbed above $102 a barrel for the first time in more than a year as the political turmoil in Egypt intensified, raising the risk of supply disruptions in the Suez Canal. In Europe, traders dumped Portuguese stocks and bonds as the country's government teetered on the edge of collapse.

That news was offset though by a brighter outlook on U.S. jobs ahead of Friday's monthly employment report. The stock market opened lower, then drifted higher in late morning trading. By noon, indexes turned positive.

"The key takeaway is that jobs matter more than Egypt," said Alec Young, a global equity strategist at S&P Capital IQ. "Nothing is more important to the state of the economy than the jobs market."

In the U.S., fewer people sought unemployment benefits last week and ADP, a payrolls processor, said businesses added more jobs last month than analysts had expected. The government's broader monthly survey of U.S. employment is scheduled to be released Friday morning. Economists predict that employers added 165,000 jobs in June.

The Dow Jones industrial average closed up 56.14 points, or 0.4 percent, to close at 14,988.55.

The Standard & Poor's 500 rose 1.33 points, or 0.1 percent, to 1,615.41. The Nasdaq composite gained 10.27 points, or 0.3 percent, to 3,443.67.

Trading closed at 1 p.m. Eastern Daylight Time ahead of the July 4th holiday Thursday. Regular trading will resume Friday.

Investors will be watching the government's jobs report closely in hopes of figuring out what the Federal Reserve will do next.

Fed chairman Ben Bernanke said June 19 that the central bank was considering easing back on its stimulus program later this year if the economy strengthens enough. The central bank is buying $85 billion in bonds every month to keep interest rates low and encourage spending.

The Fed may be forced to keep stimulating the economy because U.S. growth remains muted, said Derek Gabrielsen, a wealth advisor, at Strategic Wealth Partners. That will provide a boost to stocks.

"The schedule that (Bernanke) laid out is not going to be realized as quickly as he said," Gabrielsen said. "I don't think the economy can handle it."

Payroll processing firm ADP said that U.S. employers added 188,000 jobs in June, more than the 155,000 forecast by economists. Also, the government's weekly report on unemployment claims provided more evidence that layoffs remain low and job gains steady. The number of Americans seeking unemployment benefits fell 5,000 to 343,000.

In U.S. government bond trading, the yield on the 10-year Treasury note was unchanged at 2.48 percent from Tuesday.

In Europe, stock markets slumped after the yield on Portugal's benchmark 10-year bond surged almost a percentage point to 7.31 percent. Investors are worried about the future of the bailed-out country and its efforts to get a handle on its debt after two Cabinet members quit.

Germany's DAX index fell 1 percent to 7,829 and the U.K.'s FTSE 100 fell 1.2 percent to 6,229.

"Overseas news has certainly played a role in U.S. market opening on the weak side this morning," said Michael Sheldon, chief market strategist at RDM Financial Group. "You have political unrest in Egypt, which has helped propel oil prices back above $100. We're also starting to see a re-emergence of political risk in Europe, which is stirring the pot."

The price of oil climbed $1.43, or 1.5 percent, to $101.03. Oil has climbed almost 8 percent since Monday last week. The price of gold rose $8.50, or 0.7 percent, to close at $1,251.90.

ADVERTISEMENT

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by
ADVERTISEMENT

facebook - twitter on Facebook & Twitter

Follow on TwitterFollow IBJ on Facebook:
Follow on TwitterFollow IBJ's Tweets on these topics:
 
Subscribe to IBJ
  1. If I were a developer I would be looking at the Fountain Square and Fletcher Place neighborhoods instead of Broad Ripple. I would avoid the dysfunctional BRVA with all of their headaches. It's like deciding between a Blackberry or an iPhone 5s smartphone. BR is greatly in need of updates. It has become stale and outdated. Whereas Fountain Square, Fletcher Place and Mass Ave have become the "new" Broad Ripples. Every time I see people on the strip in BR on the weekend I want to ask them, "How is it you are not familiar with Fountain Square or Mass Ave? You have choices and you choose BR?" Long vacant storefronts like the old Scholar's Inn Bake House and ZA, both on prominent corners, hurt the village's image. Many business on the strip could use updated facades. Cigarette butt covered sidewalks and graffiti covered walls don't help either. The whole strip just looks like it needs to be power washed. I know there is more to the BRV than the 700-1100 blocks of Broad Ripple Ave, but that is what people see when they think of BR. It will always be a nice place live, but is quickly becoming a not-so-nice place to visit.

  2. I sure hope so and would gladly join a law suit against them. They flat out rob people and their little punk scam artist telephone losers actually enjoy it. I would love to run into one of them some day!!

  3. Biggest scam ever!! Took 307 out of my bank ac count. Never received a single call! They prey on new small business and flat out rob them! Do not sign up with these thieves. I filed a complaint with the ftc. I suggest doing the same ic they robbed you too.

  4. Woohoo! We're #200!!! Absolutely disgusting. Bring on the congestion. Indianapolis NEEDS it.

  5. So Westfield invested about $30M in developing Grand Park and attendance to date is good enough that local hotel can't meet the demand. Carmel invested $180M in the Palladium - which generates zero hotel demand for its casino acts. Which Mayor made the better decision?

ADVERTISEMENT