Stocks climb as job cuts abate
American employers shed 54,000 jobs in August, fewer than expected. The unemployment rate rises to 9.6%. Goldcorp will buy Andean Resources for $3.4 billion.
By Sung Moss, TheStreet
Updated at 1:35 p.m. ET
Stocks were rising today after the government said U.S. employers cut fewer jobs than expected in August.
At 1:35 p.m. ET, the Dow Jones Industrial Average ($INDU) was up by 93 points, or 0.9%, at 10,413. The S&P 500 ($INX) was up by 11 points, or 1%, at 1,101. The Nasdaq ($COMPX) was rising by 26 points, or 1.2%, to 2,226.
The Labor Department reported that American employers shed 54,000 jobs in August, fewer than the 100,000 economists surveyed by Reuters had expected. Excluding government jobs, payrolls at U.S. companies expanded by 67,000, more than the 41,000 forecast.
The nation's unemployment rate rose to 9.6% from 9.5% in July, as expected. The Labor Department also revised the number of jobs lost in July to 54,000 from 131,000.
"It was a pretty encouraging jobs report. Not only were the August numbers better, but we also got positive revisions in June and July," said Phil Orlando, chief equity market strategist at Federated Investors (FII). "This puts employment in better stead than what we thought yesterday."
The number of people unemployed for more than 27 weeks declined by 323,000. The number of "discouraged workers" -- those who have stopped looking for positions because they believe none are available -- rose by 352,000 to 1.1 million.
Stocks retreated from earlier gains after the Institute for Supply Management said its gauge of service-sector activity fell to 51.5 in August from 54.3 in July. Economists had expected the index to decline to 53. Readings above 50 indicate growth.
Cisco (CSCO) was the Dow's biggest gainer, adding 2.2%, followed by Caterpillar (CAT) and JPMorgan (JPM). Verizon (VZ) was the benchmark's top laggard, falling 1%, followed by McDonald's (MCD) and AT&T (T).
In company news, BP (BP) said costs related to the Gulf of Mexico oil spill have hit $8 billion. The company has paid out $399 million for damage claims. BP's American depositary receipts were increasing 1.6% to $37.15.
The string of deal news also carried over into Friday after Goldcorp (GG) said it will buy Australian miner Andean Resources for $3.4 billion, topping an all-stock offer from rival Eldorado Gold (EGO). Goldcorp shares were falling 2.6% to $42.66, while Eldorado's were sinking 3.4% to $18.80.
In earnings news, video game maker Take-Two Interactive Software (TTWO) blew away second-quarter earnings and sales estimates late yesterday and offered an upbeat outlook. The company's $355 million in revenue was 18% more than analysts' estimates. Adjusted earnings landed at 28 cents a share, compared with projections for a 6-cent loss. Take-Two shares were adding 9.9% at $9.73.
Campbell Soup (CPB) said its fiscal fourth-quarter earnings rose 64% to $113 million, or 33 cents a share. Analysts had expected a per-share profit of 30 cents. The company's sales declined 1% to $1.5 billion, falling short of analysts' forecasts of $1.6 billion. Campbell's shares were down 3.5% at $36.02.
Walgreen (WAG) said sales at stores open at least a year rose 2.1% in August, less than projected. The stock was little changed at $28.29.
Crude oil for October delivery was down by $1.38 at $73.64 a barrel. The December gold contract, the most actively traded gold future, was losing $2.30 at $1,2451.10 an ounce.
The benchmark 10-year Treasury note was down 7/32, boosting the yield to 2.652%.
The dollar was trading lower against a basket of currencies, with the dollar index down 0.5%.
The FTSE in London advanced 1.1% and the DAX in Frankfurt increased 0.8%. Hong Kong's Hang Seng rose 0.5%, while Japan's Nikkei gained 0.6%.
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Just reported, pending home sales for June fell 1.1%, which was worse than the 0.8% decrease forecast by the Briefing.com consensus. Today's reading followed last month's revised increase of 6.0% (from 6.1%). Nasdaq -16.58 at 4432.98... NYSE Adv/Dec 1080/1693... Nasdaq Adv/Dec 738/1640.
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