Dow tops 11,000 for 1st time since May

Investors hope the Fed will act after the US economy lost 95,000 jobs in September. The unemployment rate remains unchanged at 9.6%. Alcoa's shares rally after earnings beat forecasts.

By TheStreet Staff Oct 8, 2010 7:55AM

TheStreetBy Melinda Peer, TheStreet


Updated at 12:41 p.m. ET


The Dow Jones Industrial Average topped 11,000 for the first time in five months after a weak jobs report strengthened expectations that the Federal Reserve will take steps to boost the economy.


At 12:41 p.m. ET, the Dow Jones Industrial Average ($INDU) was up by 61 points, or 0.6%, at 11,009. The S&P 500 ($INX) was up 6.6 points, or 0.6%, at 1,165. The Nasdaq ($COMPX) was rising by 13 points, or 0.6%, to 2,397.


Investors bet the Federal Reserve will buy back bonds and take other steps to encourage borrowing and spending after today's disappointing jobs report. 


The Labor Department said the U.S. economy shed 95,000 jobs after losing a revised 57,000 in August. Economists had expected the number of jobs to be unchanged.

The unemployment rate remained at 9.6%. Economists had predicted it to rise to 9.7%. The private sector added 64,000 jobs, less than the projected 75,000.


"The market really pays attention to private payrolls, and since they came in weaker than expected, that indicates that businesses are still cautious," said Linda Bakhshian, a portfolio manager at Federated Investors (FII). "What's driving the market today are expectations that quantitative easing is coming and probably sooner rather than later."


On Wednesday, Automatic Data Processing (ADP) said U.S. companies shed 39,000 jobs in September after adding 10,000 in August. The drop disappointed analysts, who had been looking for an increase of 18,000 payrolls.


Alcoa (AA) was leading the blue-chip rally, rising 6.4% to $12.98 after the aluminum maker's third-quarter earnings beat estimates late Thursday. Excluding certain items, the company earned 9 cents a share, beating estimates of 5 cents. Sales of $5.3 billion exceeded expectations for $4.95 billion. Alcoa was the first Dow component to report third-quarter results.


Fellow industrial stocks Boeing (BA) and Caterpillar (CAT) were also gaining after wholesale inventories grew a better-than-expected 0.8% in August, the Commerce Department said. Economists, according to, had been looking for an increase of 0.4%.


Shares of Freeport-McMoRan Copper & Gold (FCX) were rising 3.9% to $94.94 after Barclays (BCS) boosted its price target to $130 from $120.


Fertilizer stocks were rallying after the U.S. Department of Agriculture cut its supply forecasts for corn, soybeans and wheat. Potash Corp. of Saskatchewan (POT) was rising 2.6% to $144.57, while Mosaic (MOS) was up 8.7% to $66.87 and CF Industrial Holdings (CF) was up 11% to $109.91.


Kraft (KRT) and Verizon (VZ) were the Dow's biggest laggards.


Bill Ackman's hedge fund Pershing Square Capital Management picked up a 16.5% stake in J.C. Penney (JCP), according to a regulatory filing. CNBC said Pershing Square also bought an 11% stake in spirits company Fortune Brands (FO). J.C. Penney's stock was gaining 5.3% to $33.31 and Fortune's stock was rising 7.7% to $56.


Shares of Motorola (MOT) were losing 2% at $8.42 after Citigroup (C) downgraded the stock to "hold" from "buy."


Shares of ImmunoGen (IMGN) were rising 2.5% to $6.87 on news that the "armed antibody" drug that it's developing with Roche saw a higher response rate and lower toxicity than the breast cancer drug Herceptin.


Penn National Gaming (PENN) said it will enter the Las Vegas market, sending shares down 1.5% to $30.42 as investors questioned the casino company's ability to thrive in the recession-battered region.


Japan approved new stimulus funding of 5.05 trillion yen ($61 trillion) to bolster its sluggish economy. 


Hong Kong's Hang Seng rose 0.3%, while Japan's Nikkei lost 1%. The FTSE in London was slipping 0.3%, and the DAX in Frankfurt was little changed.


In commodity markets, crude oil for November delivery was adding 47 cents at $82.14 a barrel. The December gold contract was gaining $6.70 to $1,341.70 an ounce.


The dollar was trading lower against a basket of currencies, with the dollar index down by 0.2%. The benchmark 10-year Treasury note strengthened 9/32, diluting the yield to 2.353%.


Related Articles

Please help us to maintain a healthy and vibrant community by reporting any illegal or inappropriate behavior. If you believe a message violates theCode of Conductplease use this form to notify the moderators. They will investigate your report and take appropriate action. If necessary, they report all illegal activity to the proper authorities.
100 character limit
Are you sure you want to delete this comment?


Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.



Quotes delayed at least 15 min
Sponsored by:


There’s a problem getting this information right now. Please try again later.
There’s a problem getting this information right now. Please try again later.
Market index data delayed by 15 minutes

[BRIEFING.COM] The stock market welcomed the new trading week with a mixed session that saw relative strength among large-cap stocks, while high-beta names underperformed. The Dow Jones Industrial Average (+0.3%) and S&P 500 (-0.1%) finished near their flat lines, while the Nasdaq Composite and Russell 2000 both lost 1.1%.

Equities began the day on a cautious note amid continued concerns regarding the strength of the global economy. Over the weekend, China reported its first decline ... More


There’s a problem getting this information right now. Please try again later.
Sponsored by: