Friday 2nd November 2012 |
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Wall Street received much-needed good news in the form of better-than-expected data on the American jobs market and consumer confidence, bolstering optimism about a recovery in the world's largest economy.
Applications for unemployment benefits declined 9,000 to 363,000 in the week ended October 27. That bettered expectations of economists polled by Bloomberg News, who had forecast 370,000. Data for New Jersey and the District of Columbia were estimated because those offices were closed due to Hurricane Sandy, a spokesman told Bloomberg.
Meanwhile, American companies hired 158,000 workers in in October, according to ADP Research Institute data. That compares with a revised 114,000 increase in September.
"There is some evidence of labour market improvement," David Sloan, an economist at 4Cast in New York, told Reuters. "It is not totally convincing yet but overall the message is positive."
US manufacturing grew more than expected last month, as the Institute for Supply Management's factory index rose to 51.7, from 51.5 in September.
Last but not least, a separate report showed that confidence of the all-important US consumer last month rose to the highest level since February 2008. The Conference Board's index climbed to 72.2, from a revised 68.4 in September.
In afternoon trading in New York, the Dow Jones Industrial Average rose 0.87 percent, the Standard & Poor's 500 Index gained 0.85 percent, while the Nasdaq Composite Index climbed 1.22 percent.
The economic data helped but so did expectations that fixing the damage inflicted by Sandy will at least support extra jobs and spending.
"People are going to go back and forth with the impact of the storm for some of the companies, but now they are focusing on the fact that the rebuilding effort will result in substantial capital spending, and maybe reduce the unemployment rate," Rick Meckler, president of investment firm LibertyView Capital Management in Jersey City, New Jersey, told Reuters.
All eyes are now on tomorrow's US jobs report, which is expected to show non-farm employers added 125,000 jobs in October and an increase in the unemployment rate to 7.9 percent.
The latest corporate earnings were mixed, with Visa surpassing expectations and Pfizer falling short.
In Europe, the Stoxx 600 Index finished the session with a 1.3 percent increase from the previous close.
The International Monetary Fund said that measures being considered to make Greece's debt sustainable must reduce that burden significantly.
"Our view is that there are many options to help reduce Greece's debt burden and they should be considered," IMF spokesman Gerry Rice told reporters in Washington today, Bloomberg reported. Debt buybacks "could be useful if they were implemented in such a way as to deliver a meaningful reduction."
BusinessDesk.co.nz
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