Stocks jump as US adds more jobs than expected

July payrolls increased by 163,000, though the unemployment rate rose. Average hourly earnings are up. A key index of nonmanufacturing business activity also beats forecasts.

By TheStreet Staff Aug 3, 2012 8:44AM
Wall StreetUpdated at 12:03 p.m. ET


By Andrea Tse and wire reports


Stocks surged Friday after government reports on employment and business activity for July came in better than expected.


The Dow Jones Industrial Average ($INDU) was up 251 points at 13,130. The S&P 500 ($INX) was up 28 points at 1,393. The Nasdaq Composite ($COMPX) was up 65 points at 2,975.


The Labor Department reported that July nonfarm payrolls rose by 163,000, better than the expected 100,000. It was the biggest monthly gain since February. Average hourly earnings edged up by 2 cents to $23.52.


The unemployment rate rose to 8.3%, and the June nonfarm payrolls number was revised downwardly to 64,000. The jobless rate rose because the government uses two surveys to measure employment, The Associated Press explained. While a survey of businesses showed job gains, the unemployment rate comes from a survey of households, which showed fewer people had jobs. Economists say the business survey is more reliable.


The Institute for Supply Management's July nonmanufacturing index came in at 52.6 after a June reading of 52.1, CNBC reported. Economists had expected a reading of 52. A reading above 50 indicates expansion.

American International Group (AIG) reported second-quarter after-tax operating income of $1.9 billion, or $1.06 a share, topping analysts' estimates of 57 cents a share. Revenue rose 3% to $17.12 billion. The insurance giant repaid all of the loans it owed to the Federal Reserve as part of bailout funding it received in 2008 and 2009.


Procter & Gamble (PG) reported an increase in net income of 45% in its fourth quarter, helped by the sale of its snacks division. Excluding special items, earnings came in at 82 cents a share, exceeding estimates of 77 cents a share. Overall, revenue fell by 1% to $20.21 billion, missing Wall Street's target of $20.26 billion because of higher commodity costs and a strong dollar.


LinkedIn (LNKD) on Thursday met Wall Street's earnings expectations for its second quarter but beat on the top line. The company reported second-quarter earnings of 16 cents a share on revenue of $228.2 million. Analysts were expecting 16 cents a share on revenue of $216.28 million. LinkedIn expects third-quarter sales of $235 million to $240 million. Analysts expect $236.1 million.


Toyota (TM) on Friday posted profit for the April-June quarter of 290.3 billion yen ($3.7 billion), up from 1.1 billion yen a year earlier, and the automaker raised its sales target for the year. Toyota expects record sales in 2012 of 9.76 million vehicles, up from 7.95 million vehicles sold in 2011.


SAP (SAP) agreed to pay Oracle (ORCL) $306 million in damages over copyright infringement allegations. Oracle won a trial on the same issues two years ago and was awarded $1.3 billion in damages. A judge threw out the award, but the latest agreement clears the way for Oracle to ask an appeals court to restore the $1.3 billion jury award.


Bain Capital and Thomas H. Lee Partners are among several parties that have put in initial bids for McGraw-Hill's (MHP) education business, sources told Reuters. A deal could value the world's second-largest education company by sales at around $3 billion.


416Comments
Aug 3, 2012 9:31AM
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8.3% is a laughable manipulated to the hilt number. They chose to ignore people who have just given up and/or no longer on the unemployed roles, even though they are STILL not employed. I think the REAL number is more like 14-15%. What a scam!
Aug 3, 2012 9:33AM
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Can we blow-up the whole unemployed, under employed BS statistics. All we need to know is how many people are working and what the tax revenue is month over month.
Aug 3, 2012 9:42AM
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Wonder what the revised number will be.
Aug 3, 2012 12:07PM
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Sometime this year, we taxpayers will again receive another 'Economic Stimulus' payment.  This is indeed a very exciting program, and I'll explain it by using a Q & A format:

Q. What is an 'Economic Stimulus' payment ?
A. It is money that the federal government will send to taxpayers.

 

Q.. Where will the government get this money ?
A. From taxpayers.

 

Q. So the government is giving me back my own money ?
A. Only a smidgen of it.

 

Q. What is the purpose of this payment ?
A. The plan is for you to use the money to purchase a high-definition TV set, thus stimulating the economy.

Q. But isn't that stimulating the economy of China ?
A. Shut up.

Below is some helpful advice on how to best help the U.S. economy by spending your stimulus check wisely:

* If you spend the stimulus money at Wal-Mart, the money will go to China or Sri Lanka .

* If you spend it on gasoline, your money will go to the Arabs

* If you purchase a computer, it will go to India , Taiwan or China .

* If you purchase fruit and vegetables, it will go to Mexico, Honduras and Guatemala

* If you buy an efficient car, it will go to Japan or Korea .

* If you purchase useless stuff, it will go to Taiwan .

* If you pay your credit cards off, or buy stock, it will go to management bonuses and they will hid it offshore

Instead, keep the money in America by:

1) Spending it at yard sales, or

2) Going to ball games, or

3) Spending it on prostitutes, or

4) Beer or

5) Tattoos.

(These are the only American businesses still operating in the U.S. )

Conclusion:

Go to a ball game with a tattooed prostitute that you met at a yard sale and drink beer all day!


Aug 3, 2012 9:13AM
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Payroll up for summer help. Who are they kidding? This is all BS as usual. Happy Friday as the Bankers need to pump up for weekend expenses and will cash in on Monday!!!
Aug 3, 2012 9:53AM
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If you layoff 350K and hire 160K you are way upside down.
Aug 3, 2012 11:43AM
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Are the markets so shallow that they honestly believe these abysmal job numbers represent job growth in a disastrous economy that has never come out of the recession.  A failed presidency, a Federal Reserve that has not done anything for all Americans except prop up the stock market and created no "real" jobs.  The stock market needs to start making it on their own and not depending on the printing of money, creating inflation and devaluing our money!
Aug 3, 2012 11:15AM
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30,000 of those jobs were in restaurants and bars!  The type of jobs that shouldn't even be reported because 90% of their wage is tips!

 

Also, notice how the unemployment rate ticked UP to 8.3% and the news media is trying to push that aside with 'excuses' as to why that is happening........................here's a hint for the media and the rest of the world...............the unemployment rate is much, Much, MUCH higher than the numbers the government is reporting!  It's more like around 20%! Hell, I have a friend who just got laid off after 34 years of loyal service to her company...........she's now working for tips!

 

Meanwhile, the national debt is at 16 trillion and rising!

Aug 3, 2012 10:21AM
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Bain Capital - Let's see
They funded this small , start up company in CT back in the 1990's.
It was called
STAPLES

Today it employs over 90,000 people which is more jobs than Obuma could create in his lifetime.

Yes, that evil Bain Capital , can you imagine creating companies and jobs and wealth ?
EVIL !!


Aug 3, 2012 8:57AM
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Pretty average jobs report - better than expected but still not close to being acceptable.  The tick up in the UE rate has been long overdue.  One glaring issue is that the labor participation rate dropped again.

This jobs report is actually probably great news for the markets - they get the best of both worlds; the number of jobs created was way above expectations.  And on the other hand, with the increase  in the UE rate, the Fed will be more likely to come through with more easing - something else the market is craving.

Aug 3, 2012 12:15PM
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I think we have reached a point that no matter how many jobs are created we will have high unemployment.  With technology, businesses are able to produce with many fewer employees. The old jobs that went to the unprepared and unskilled will likely not return. Those are the jobs that go to the low bidder. Now something that will upset many of you.  It is time to pull back on population growth.  We have too many imigrants. We have too many many people having too many babies that will not be raised properly and not trained to do anything.  Our biggest population growth in the USA is in the people who can contribute the least. When our ability to support these people is done we will see real poverty again in America.
Aug 3, 2012 9:56AM
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More BULL "S" from Wall Street ! Stocks rally on July  job increase ? Increase must be in China because it is not in the US. TAKE YOUR MONEY AND RUN     FRAUD STREET IS A RIGGED GAME
Aug 3, 2012 9:41AM
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LA Times reports this morning of a new jersey trading company that "accidently" had their computer system buy a shid load of stock within 4 minutes that was supposed to occur over a few weeks.  nearly taking that trading firm out of business. 

 

shades of Terminator where 'we" let the computer run our national defense.  the reality however is what we want computer control over is our financial lives.  but the net result just may be the same as sc fi......

 

so how long until another accident as computers get used more and more for "cruise control" investing? 

Aug 3, 2012 10:21AM
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Let see if this works this time.  Write something NBC doesn't like it does not post.  Take your money and run as it is all BS.  How many people are out of work now compared to 4 years ago.  And Harry Reid, you should be careful, you keeping making claims, and Romney might started asking about all the sealed crap on Oblama.  He should just say he has a proven record of making money.  More then you or any other idiot.  Now, to all you Steers and Queers, yes I will be back at Chick-A-Fil. 
Aug 3, 2012 11:47AM
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 just raisin' the market....so they can drop it back down next week!!!  what a joke!!!  we're all just they're puppet's!!!
Aug 3, 2012 9:52AM
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Yes, there were a good number of part time and temp positions in help wanted ads lately.
Aug 3, 2012 11:40AM
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So we still lost more jobs than we gained and this is cause for celebration?? June and July provide lots of temp jobs as tourist services ramp up for the season and temps are hired to cover vacation time. Also surges in things like road maintenance. But all these jobs are TEMPORARY. Come Sept. their GONE. Wall street whores at work.
Aug 3, 2012 9:04AM
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What will happen when all the pools, amusement parks, and summer jobs vanish n September?

I hvae started  to look at the base numbers and am not sure how to read this report.  The number looking for work declined.   The number of jobs in total was down a few thousand.   If we are creating jobs net, how come the unemployment percentage went up...  

I will have to read the whole damn thing to make heads or tails out if to see if it is good.   There are an awful lot of seasonal factors adjusting the numbers too....

Worst part still was the revised June estimate being going down to 64K...  So they really expect us to believe the job market jumped up fro 64K to 163K?  Was their massive hiring in July?  
Aug 3, 2012 10:16AM
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Once a month I get my good laugh at all of the idiots who try to take the Job Information numbers and construe, misconstrue, manipulate, adjust or just simply restate, because they do jive with their political feelings.  Sorry that your feelings getting hurt, buck-up, life goes on.  The Job numbers are calculated and released the same each month.  Accept them as they are.  Quit trying to change them to suit your decor.
Aug 3, 2012 10:23AM
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So let me get this straight - we added 163,000 more jobs, but the unemployment rate jumped up to 8.3%.  Hmmm.
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