Stock futures strengthen after labor market data

Jobless claims fall to the lowest level since Feb. 2008. S&P downgrades Spain's debt. Citigroup raises US equities to overweight. Ruby Tuesday reports an in-line profit.

By TheStreet Staff Oct 11, 2012 9:16AM
Updated at 9:16 a.m. ET


By Andrea Tse


U.S. stock futures were gaining ground Thursday as investors cheered a better-than-expected report on labor market conditions and shrugged off Standard & Poor's two-notch downgrade of Spain's debt.


Moody's, which already has Spain on watch to be downgraded to junk status, will likely go next, according to Stephen Guilfoyle, U.S. economist at Meridian Equity Partners.


 "The perception … is that this or these downgrades make it that much easier for Spain to ask for the help they need when their huge debt bill comes due in about 10 days," said  Guilfoyle. "By Spain asking for help, the ESM can then purchase Spanish sovereign debt in the primary market, and the ECB can then activate their OMT program to buy said debt in the secondary market. The provided liquidity will take the pressure off of the throat of Spain, at least for now, kicking that proverbial can a much further ways down that road."


 "Thus, relief."


Market sentiment also got an early boost with Citigroup strategists raising their recommendation on U.S. equities to overweight and calling for a global rally through the end of 2013, citing a combination of strong earnings per share momentum and aggressive central bank stimulus plans.

 

Futures for the Dow Jones Industrial Average ($INDU) were up by 51 points at 13,319. S&P 500 ($INX) futures were up by 7.4 points at 1,433. Futures for the Nasdaq ($COMPX) were rising by 16.75 points to 2,739.


The Labor Department reported that initial jobless claims in the week ended Oct. 6 fell 30,000 to 339,000 from the previous week's upwardly-revised figure of 369,000, the lowest level since Feb. 2008.


The four-week moving average was 364,000, a decrease of 11,500 from the prior week's average of 375,500.


Continuing claims for the week ended Sept. 29 was 3.273 million, a decrease of 15,000 from the preceding week's upwardly-revised level of 3.288 million.


Economists on average predicted initial jobless claims of 370,000 and continuing claims of 3.275 million.


The Census Bureau reported that the U.S. trade deficit widened to $44.22 billion in August from $42.47 billion in July. Economists were expecting a U.S. trade deficit of $44 billion.


The Bureau of Labor Statistics said that U.S. import prices rose 1.1% in September versus 1.1% in August and that export prices increased 0.8% in September compared with 1% in August.


The major U.S. equity averages finished sharply lower on Wednesday as the early results for third-quarter reporting season exacerbated investor worries about a slowing global economy.


The FTSE 100 in London was up 0.46% and the DAX in Germany was higher by 0.66% Thursday. The Nikkei Average in Tokyo closed down 0.58% and the Hang Seng in Hong Kong finished up 0.38%.


November crude oil futures were rising 62 cents at $91.87 a barrel. December gold futures were adding $5.80 at $1,770.90 an ounce.


The benchmark 10-year Treasury was down 4/32, lifting the yield to 1.693%. The dollar was up 0.02%, according to the dollar index.


In corporate news, JPMorgan Chase's (JPM) chief financial officer, Douglas Braunstein, is expected to step down over the next two quarters and is likely to move into a different job at the bank, The Wall Street Journal reported, citing people close to the company.


Caterpillar (CAT) stock was cut to sector perform from outperform at RBC Capital, whose analysts pointed to high inventory levels for both the company and the earth-moving equipment industry as a whole, and sluggishness in Europe and China.


Ruby Tuesday (RT), the restaurant operator, reported an in-line profit for its fiscal first quarter on Wednesday but gave an outlook that hints at some downside to Wall Street expectations for the full year.


Hewlett-Packard's (HPQ)  position as the top seller of personal computers has come to an end with Lenovo as the new leader, according to Gartner figures.


Alaska Air (ALK) announced Thursday an agreement to buy 50 Boeing (BA) 737 aircraft with the ability to purchase an additional 62 aircraft through options and purchase rights.


Soft drink giant Coca-Cola (KO) is reportedly is in talks to invest around $10 million in subscription music-streaming service Spotify.


Walt Disney (DIS) is facing a lawsuit by Stan Lee Media over rights to Marvel characters such as Spider-Man and Iron Man.


More from TheStreet.com


17Comments
Oct 11, 2012 9:39PM
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Lyin' Ryan is getting an a$$ whooping from Biden, just as predicted and expected. Stupid useless Repuklican imbeciles! LMAO

 

Barack Obama in 2012!

 

Chris Van Hollen in 2016 & 2020!

 

God bless America!

Oct 11, 2012 1:21PM
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How much do you think tonight's veep debate will effect tomorrow's opening number?
Oct 12, 2012 9:47AM
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Mr Etch a sketch, Mr Flip Flop and all his MaLarky has been outted.

See him and all his MaLarky on You tube Romney Flip Flop.

Oct 11, 2012 1:24PM
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Simpson n Bowles just today said there shouldn't be any increase in Defense spending or it will 'BUCKLE' the economy. They also said if Congress doesn't act on the Fiscal Cliff soon there will be irreversible damage to the economy.

Can you hear them now..... Mr Romney ????

Oct 12, 2012 11:25AM
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BIDEN 'WON'....all the laughing was about how fanciful Ryan's fiscal prognostications were.  How could you not laugh?  It would be as funny as someone putting a dollar in your right pocket and taking 2 dollars from your left pocket and calling it 'momentum', or "good jobs".....LOL  LOL.....
Oct 11, 2012 12:26PM
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"Well.....Hope we aren't faced with a big YO_YO today..?"

Not an option any longer. The slower motion indicates a hidden variable. At least you are pro-active with yours. Most think they can either ride out a leap off the cliff or beat a super-computer.
Oct 11, 2012 8:57PM
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Well, like we said this morning and like we always say, we can be up 80, 90, 100, 200, totally immaterial when manipulators take control down here....All we had today was another sucker's rally and when the call came the selloff started, slowly but surely, started at about 1130 hrs and that's all she wrote. Of course it could have been worse, these scumbags wanted to drop us a lot more, fortunately we were able to hold a bit. Again, news do not move markets, people do...Although lets be serious, the unemployment claims number this morning was tainted. hey, its election season. Glad tomorrow is friday, they only have one more day this week to manipulate things. Oh well, we will see.
Oct 11, 2012 11:52AM
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More BULL "S" from the spin Doctors Unemployment rate down ? The current rate is at 22% and climbing ! OFF THE CLIFF WE GO ! But Jon Corzine ,Jamie Dimon and the other top CEO dont have to worry about the unemployment rate ! Only the midddle class =SCREW THE PEOPLE OVER AND OVER AGAIN !
Oct 11, 2012 9:56AM
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Well.....Hope we aren't faced with a big YO_YO today..?

Maybe something decent to the upside....Most the News is just blase..Or Rinse and Repeat..

Let's go a half percent to the good side..

 

And quit worrying about unimportant subjects..That don't really effect the Markets that much.

Quit worrying about scumbags and manipulators..

And let's move on with making America better..

Oct 11, 2012 10:17AM
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After today, only 17 trading days till we close the polls.

I'm guessin' we'll see the S&P above 1,500 by then.

Any thoughts?

Oct 11, 2012 12:22PM
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"At about 1130 hrs scumbags called for the first wave of selling so"

It's actually a near-identical pattern everyday. Banks borrow from the Fed on Monday and watch it go bust the rest of the week. Around noon everyday, someone wakes up and switches the program so it looks like they aren't the only player. At 3 pm everyday, the fish lines out for suckers gets drawn in. There are no markets, no economy... just big banks big CEO manipulation and big law firm clients in control.
Oct 11, 2012 11:52AM
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At about 1130 hrs scumbags called for the first wave of selling so, more than half of the gains have been taken back...Not a big surprise, like we said earlier, manipulators dominating and starting to take control slowly but surely....Cheating still pays down here...More later
Oct 11, 2012 10:54AM
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By end of year maybe 1500...It's taken a long time to get here....Corrections keep adjusting..

 

But trends are still intact.....And going across 500 companies,takes upside in many of them.

 

Not weighted like the DOW or Nasd....Where just a handful of companies can make a huge diff.

Oct 11, 2012 11:21AM
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I like the fact that the S&P is NOT racing to get to another high point this time; it shows a certain maturity has hit the markets, and we are not getting led by 'irrational exuberance' this time around.
All the numbers are not impacting to the downside, only a gentle trending upward.  Anecdotal, but many business folks here are starting to feel good again AND some industries are expanding . 
RR is right, we have to work our way past the toxic collateral damage from the election era garbage to arrive at an unpoliticized market again.

Looking forward to it.

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