In the U.S.: U.S. Stock Futures Gain on Better-Than-Forecast Jobs Data

4 October 2012

No reaction to last night’s Presidential Debate? Better jobs numbers rule proceedings thus far.

U.S. stock futures rose, indicating the Standard & Poor’s 500 Index will climb for a fourth day, as jobless claims increased less than economists forecast and European policy makers held borrowing costs at record lows.

Bank of America Corp. (BAC) and Citigroup Inc. (C) each gained 1 percent to pace advances among financial shares. Gap Inc. (GPS) increased 1 percent as September same-store sales topped estimates. Sprint Nextel Corp. (S) decreased 2.5 percent after the stock was downgraded by Robert W. Baird & Co.

S&P 500 futures expiring in December increased 0.5 percent to 1,451.5 at 8:47 a.m. in New York. Dow Jones Industrial Average futures expiring the same month rose 49 points, or 0.4 percent, to 13,475.

Applications for jobless benefits increased 4,000 to 367,000 in the week ended Sept. 29, Labor Department figures showed today. Economists forecast 370,000 claims, according to the median estimate in a Bloomberg survey. The prior week’s reading was the lowest in two months.

The release came ahead of tomorrow’s government jobs report. Economists forecast that the Labor Department’s release will show that the economy created 115,000 jobs last month and the unemployment rate increased to 8.2 percent from 8.1 percent. The S&P 500 rose for a third day yesterday after ADP Employer Services said companies added 162,000 jobs last month, exceeding economists’ estimates.

The Federal Open Market Committee will release the minutes of its latest policy meeting at 2 p.m. today.

ECB Decision

The European Central Bank kept interest rates on hold as President Mario Draghi waits for Spain to decide if it needs his help. Policy makers meeting in Ljubljana, Slovenia, left the benchmark rate at a historic low of 0.75 percent, as predicted by 48 of 52 economists in a Bloomberg News survey. The Bank of England left its bond-purchase target at 375 billion pounds ($604 billion), as forecast by all 40 economists in a Bloomberg News survey.

Financial shares rose. Bank of America added 1 percent to $9.20, while Citigroup gained 1 percent to $34.40.

American International Group Inc. (AIG) rose 0.7 percent to $34.45. Daniel Loeb’s $9.3 billion Third Point LLC hedge fund added shares last quarter, betting the stock will rise as the U.S. cuts a stake acquired in the insurer’s rescue. AIG shares have “significant upside,” the New York-based fund said in a letter to investors.

Gap increased 1 percent to $37.10. September same-store sales at the biggest U.S. specialty-apparel retailer climbed 6 percent, beating the average projection for a 5.3 percent gain from analysts.

Sprint Nextel decreased 2.5 percent to $5.07. The third- largest U.S. wireless carrier was downgraded to underperform from neutral at Robert W. Baird.


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