Dow up 217 as stocks hit highest levels since May

Stocks rally strongly after the government says 163,000 jobs were added to the economy, more than expected. Kraft and HP lead the Dow; Procter & Gamble sets a share buyback program. LinkedIn's guidance impresses. Gold and oil push higher.

By Charley Blaine Aug 3, 2012 12:14PM
Charley BlaineUpdated: 6:43 p.m. ET

Stocks jumped to their highest levels in three months today after the government reported a better-than-expected gain in payroll employment in July. The unemployment rate, however, ticked up slightly to 8.3%.

The Dow Jones industrials ($INDU) jumped as many as 254 points before profit-taking trimmed the gains; the blue chips closed above 13,000 for the first time since Tuesday. The rally was big enough to completely offset four straight down days and allow the major market indexes to finish higher for the fourth straight week.

The jobs report suggests a stronger economy than had been thought and may reduce the odds the Federal Reserve will decide on a new stimulus program in September.

The Dow closed up 217 points to 13,096. The Standard & Poor's 500 Index ($INX) gained 26 points to 1,391, and the Nasdaq Composite Index ($COMPX) gained 58 points to 2,968. These were the best closes for the indexes since May 3.

Article continues below.
The Nasdaq-100 Index ($NDX), which tracks the largest Nasdaq stocks, surged 50 points to 2,676. Apple (AAPL), the biggest influence on the index, was up $7.91 to $615.70.

The jobs report was one factor that boosted stocks. Also fueling the rally: better-than-expected results from social-media site LinkedIn (LNKD). Procter & Gamble (PG) shares were higher as an announcement of a $4 billion share buyback program offset weak guidance. The Institute for Supply Management's July report on the services economy was a touch better than expected.

Gold (-GC) rallied above $1,600 an ounce. Crude oil (-CL) jumped above $91 a barrel. European stocks were also higher.

The Dow finished up 0.2% for the week, with the S&P 500 up 0.4% and the Nasdaq up 0.3%. For the year, the Dow is up 7.2%, with the S&P 500 up 10.6% and the Nasdaq up 13.9%.

Markets for the week



8/3/2012

7/20/2012

% chg.

YTD chg.
Dow Industrials

13,096.17

13,075.66

0.16%

7.19%
S&P 500

1,390.99

1,385.97

0.36%

10.61%
Nasdaq 

2,967.90

2,958.09

0.33%

13.92%
Russell 2000

788.48

796.00

-0.94%

6.42%
Crude oil 

$91.40

$90.13

1.41%

-7.52%
(per barrel)

0.00

0.00

0.00%

0.00%
U.S. Dollar Index 

82.45

82.77

-0.39%

2.39%
10-yr. Treasury

1.58%

1.56%

1.41%

-15.71%
Gold

$1,609.30

1,618.00

-0.54%

2.71%

The jobs report is a pleasant surprise
The jobs report was the third big economic event of the week, and the only one of the trio to cheer Wall Street. The Federal Reserve made no changes to basic policy at the end of a two-day meeting on Wednesday, and the European Central Bank offered no changes nor new initiatives to help the European debt crisis at its meeting on Thursday.

The 163,000 jobs gained offset a disappointing June report that was worse than originally reported. According to the Bureau of Labor Statistics, June job gains totaled just 64,000; the first estimate was 80,000.

The report showed 172,000 private-sector jobs created, up from 73,000 in June, and 25,000 manufacturing jobs added to the economy, up from 10,000 in June.

The economy has added 4 million jobs since February 2010, when the jobs market bottomed. But that's just 46% of the 8.78 million jobs lost between February 2008 and the 2010 low. About 4.5 million private-sector jobs were added in that period, which means public-sector employment fell by a half million. Most of that is in the state and local government sectors, primarily in education.

Private services added 148,000 jobs, including a healthy 14,000 increase in temporary help. The public sector shed a relatively modest 9,000 jobs and construction employment fell by a trivial 1,000. The other good news is that average weekly hours worked held at 34.5.

But the report has its downsides. While job gains were the best report since February, the unemployment rate for African-Americans was 14.1% overall and 14.8% for African-American men over age 20.

The jobless rate for men and women ages 16-19 was 21.5%, up from 20.5% in June. And the measure of people unemployed, forced to hold part-time jobs, and people who are "marginally attached to the workforce" was 15%, up from 14.9% in June but down from 16.1% in July 2011.

Energy prices -- New York close



Fri.

Thur.

Month chg.

YTD chg.
Crude oil (-CL)

$91.40

$87.13

7.58%

-7.52%
(per barrel)











Heating oil (-HO)

$2.9261

$2.8423

7.98%

0.41%
(per gallon)











Natural gas (-NG)

$2.8770

$2.9200

1.88%

-3.75%
(per mil. BTU)











Unleaded gasoline (-RB)

$2.9310

$2.8696

11.37%

10.30%
(per gallon)











Brent crude 

$108.94

$105.90

11.39%

1.45%
(per barrel)











Retail gasoline

$3.5670

$3.5340

6.89%

8.88%
(per gallon; AAA)












Customers come back to Knight Capital
Worries about a potentially big problem eased today: the woes at Knight Capital Group (KCG). Shares of the market-maker jumped $1.47 to $4.05 after news reports said two of its biggest customers -- TD Ameritrade and Scottrade -- will start to route trades through Knight's systems.

In addition, the company said it had secured a line of credit as it struggles to survive after a software glitch on Wednesday caused enormous volatility -- and left it facing a $440 million loss.

A number of big clients reportedly -- including TD Ameritrade, Scottrade, Fidelity and Vanguard -- had routed traders away from Knight after the glitch struck the market.

A big, broad rally; LinkedIn shares jump
Twenty-nine of the 30 Dow stocks were higher, along with 466 S&P 500 stocks and 95 Nasdaq-100 stocks. The one Dow laggard: Verizon Communications (VZ), down 16 cents to $44.46.

Energy, industrial and financial stocks were the market leaders. All 10 sectors of the S&P 500 were higher.

LinkedIn shares were up $15 to $108.51. The company said late Thursday it had earned 16 cents a share in its second quarter, in line with estimates. Revenue of $228.2 million, up 89% from a year ago, beat the Street estimate by $12.5 million.

The company expects $235 million to $240 million in revenue in the third quarter. The consensus estimate has been $235.2 million. For the year, it sees revenue at $915 million to $925 million, above the consensus estimate of $908.4 million.

Facebook (FB) was up $1.05 to $21.09 after rising as high as $22.16. It had briefly fallen below $20 on Thursday.

American International Group (AIG) shares were up 50 cents to $31.34 after the Treasury Department said it will sell $4.5 billion worth of AIG shares, taking another step toward unwinding its position in the financial crisis bailout programs.

Hewlett-Packard (HPQ), up 71 cents to $18.26, and Kraft Foods (KFT), up $1.57 to $40.51, were the Dow leaders.

Kraft said it will split itself in two on Oct. 1. Its legacy North American grocery business will retain the Kraft name. It will spin off its international snack food business, which will be renamed Mondelez International.

The spinoff will force a change in the Dow membership, and there's speculation that Apple might split its shares by as much as 10-to-1 so that it can be added to the Dow. The Dow is a price-weighted index. So, movements of higher-priced stocks have a bigger influence on the index.

Procter & Gamble was up $1.99 to $65.50 after announcing a stock buyback plan. Net income was up 45% from a year ago, but most of that gain came from selling its snack business. The decision to buy back shares was a reversal from June, when the company said it did not plan any share repurchases.

Crude, gold move higher; retail gasoline rises
Crude oil rose $4.19 to $91.32 a barrel on hopes that the jobs report meant a stronger-than-expected economy. Brent crude was up $2.84 to $108.74.

The national average price of gasoline was $3.567 a gallon, according to AAA's Daily Fuel Gauge Report. That's up from $3.354 on Thursday and up 2.3% for the week. The retail price is up 8.9% for the year and has risen 7.3% since bottoming for 2012 at $3.326 a gallon on July 2.

Gold, meanwhile, settled up $18.60 to $1,609.30 an ounce. Silver (-SI) settled up 80.6 cents, or 3%, to $27.80 an ounce. Copper (-HG) added 7.7 cents, or 2.3%, to $3.3675 a pound.

Interest rates were higher with the 10-year Treasury yield hitting 1.577%, up from 1.478% on Thursday.

The dollar was lower against the euro and the British pound but higher against the Japanese yen.

Coming next week: Consumer stocks will start taking their bows
The week after the jobs report is usually light on economic reports. The most important will be reports on consumer credit outstanding (Tuesday), productivity (Wednesday) and jobless claims (Thursday).

The big rush of earnings reports will continue. Consumer stocks will start to dominate, beginning with Walt Disney (DIS) after Tuesday's close, and Macy's (M) and Nordstrom (JWN) before Wednesday's open and after Thursday's close, respectively.

Also due next week:
  • Monday: American States Water (AWR), Manitowoc (MTW) and Tyson Foods (TSN). 
  • Tuesday: Emerson Electric (EMR), Expeditors International of Washington (EXPD), Molson Coors (TAP).
  • Wednesday: CenturyLink (CTL), News Corp. (NWSA), Ralph Lauren (RL), Rio Tinto (RIO) and Sodastream International (SODA).
  • Thursday: AMC Networks (AMCX), Kohl's (KSS), Elizabeth Arden (RDEN) and NVidia (NVDA).
  • Friday: Harman International (HAR), J.C. Penney (JCP) and Siemens (SI).
Short hits from the markets -- New York close



Fri.

Thur.

Month chg.

YTD chg.
Treasury yields











13-week Treasury bill

0.0800%

0.090%

-20.00%

700.00%
5-year Treasury note 

0.674%

0.611%

12.52%

-18.80%
10-year Treasury note

1.577%

1.478%

-4.94%

-15.71%
30-year Treasury bond

2.662%

2.547%

-3.66%

-7.86%
Currencies











U.S. Dollar Index

82.446

83.451

0.85%

2.39%
British pound

1.5645

1.5521

-0.38%

0.69%
(in U.S. $)

 








U.S. $ in pounds

£0.639

£0.644

0.38%

-0.68%
Euro in dollars

$1.24

$1.22

-1.92%

-4.44%
(in U.S. $)

 








U.S. $ in euros

€ 0.808

€ 0.820

1.96%

4.65%
U.S. $ in yen 

78.74

78.25

-1.26%

2.13%
U.S. $ in Chinese

6.40

6.36

0.40%

1.14%
yuan











Canada dollar

$0.999

$0.993

1.69%

1.83%
(in U.S. $)

 








U.S. dollar 

$1.002

$1.007

-1.65%

-1.80%
(in Canadian $)

 








Commodities

 

 

 

 
Gold (-GC)

$1,606.30

$1,590.70

0.32%

2.71%
(per troy ounce)

 








Copper (-HG)

$3.368

$3.291

-3.69%

-1.99%
(per pound)

 








Silver (-SI)

$27.8010

$26.9950

0.68%

-0.41%
(per troy ounce)

 








Wheat (-ZW)

$8.9125

$8.6500

17.70%

36.54%
(per bushel)

 








Corn (-ZC)

$8.0750

$7.958

27.22%

24.90%
(per bushel)

 








Cotton 

$0.7394

0.7097

3.66%

-19.35%
(per pound)

 








Coffee

$1.7380

1.7165

1.82%

-24.32%
(per pound)

 








Crude oil (-CL)

$91.40

$87.13

7.58%

-7.52%
(per barrel)










 
275Comments
Aug 3, 2012 2:47PM
avatar

What JOB GROWTH...there is none.  The only jobs to be had are minium wage otherwise you are out of luck, $7.50 to $8.50 here in cincinnati yet were getting a trolly for $3.7 million to start in one of the most depressed areas in the country, Over the Rhine (remember the riots?). They renew a few square blocks and are building high end buildings along with a casino so not one of us can frequent because we have no income The communiti was told that the casinos would be bring in their own employees hence no job creation here.. My husband and I went through 2 tours of vietnam ,survived 2 World Trade Center terrorist explosions (50th floor and 94th floor) had to sell everything including our home. Lost jobs to being out sourcing to India. Buried our friends,co-workers and family. Moved to Ohio and found no jobs, I got stage 4 cancer the doctors and hospitals cleaned out our bank accounts and what was left of our 401k's. Then I applied for disability/medicaid and  SSI and was turned down over 5 times -SSI because my husband holds down two minium wage jobs- they claim he earns TOO MUCH(can barely pay rent and put food on the table, forget about my cancer meds -no assistance) and have not been able to get disability because I spent the last few years not GAINFULLY employed -no one takes into account nor do they want to hear that there are no jobs and  no one would hire me especially undergoing chemow/stage4 cancer....I was looking and also taking care of our elderly parents -just recently buried the last my mom -who we took care of while undergoing chemo and  who our wonderful goverment told me I would have benefitted by kicking all of them to  to the curb, yes that is what I was told. So I'm in limbo waiting to hear from social security disability ----maybe I'll hear from them before I DIE!!!  Yet a nurse told me her fathers friend gets disability in his name and his dads(senior and junior) in Ohio-Indiana and Kentucky has acres of property and was golfing on that day with her dad. 6 checks one person!!! Also how much did the IRS give away just this year in returns? Why should I love and believe in my country?!!! So no THERE ARE NO JOBS AND WE"RE SCREWED!!!! Still  am stage 4 no help and possibly being driven to suicide because  we can't do this anymore long live the USA.....

 

Ps. No organization would help us even the American Cancer Society...where are our donations going too? Also our families never applied for any goverment assistance programs and we always paid our taxes ,donated and gave to our churches. Now that we need there is no one and nothing so much for doing the right thing. All doors have been shut in our faces and we've been made to feel like trash.We need to meet some of those tax cheats...they seem to be on he right track!

Aug 3, 2012 4:30PM
avatar

The following is a proposal by Warren Buffet and it sure makes sense to me!

 

 

 Congressional Reform Act of 2012

1. No tenure / no pension. A congressman/woman collects a salary while in office and receives no pay when they are out of office.

2. Congress (past, present, & future) participates in Social Security. All funds in the Congressional retirement fund move to the Social Security system immediately. All future funds flow in to the Social Security system, and Congress participates with the American people. It may not be used for any other purpose.

3. Congress can purchase their own retirement plan, just as all American do.

4. Congress will no longer vote themselves a pay raise. Congressional pay will rise by the lower of CPI or 3%.

5. Congress loses their current health care system and participates in the same health care system as the American people.

7. All contracts with past and present Congressmen/women are void effective 12/1/12. The American people did not make this contract with Congressmen/women. Congress made all these contracts for themselves. Serving in Congress is an honor, not a career. The Founding Fathers envisioned citizen legislators, so ours should serve their term(s), then go home and back to work.

 
THIS IS HOW YOU FIX CONGRESS!

Aug 3, 2012 3:37PM
avatar
4% rise in oil today on a truly sub par job report.  I see 4 dollar gas coming as the speculators are at it again.   One day one report one wild swing.   I mean really!!!
Aug 3, 2012 3:31PM
avatar
This is like saying, "I won a thousand dollars in Vegas" without telling anyone you spent two thousand to win it.  Jobs are being lost faster than they are being created.  I have first hand experience for I just lost my job.  Fortune 500 company, white collar, excellent performer, 26 years of experience, no longer needed as a part of a now termed Reduction In Force.  It's a layoff, the economy sucks, and big companies are being run by ruthless millionaires who couldn't give a damn about their people, only about themselves, their pockets, and the bottom line.  You can throw numbers around all day, but until the economy really turns around, and we really start creating more jobs that are being lost, we are all just like a dog chasing his own tale, the faster we go, the dizzier we get, and we ultimately go nowhere.
Aug 3, 2012 1:11PM
avatar
Next week these people who just found a job will have to quit because they can't afford the gas to get to work.
Aug 3, 2012 1:04PM
avatar
Oil up 4% on Strong job growth...... where exactly is this strong growth occuring because it is not in North America.  Can you say manipulation?  Only on fraud street can unemployment rise and strong job growth be used as a justification to run up oil futures.  Heres an idea if you purchase futures make it a law that you have to show the IRS documentation that you purchased, shipped and sold those barrels of oil you purchased futures for.  Would that not eliminate speculation like this?  Oh wait we can't let the congresses rich friends lose out on anything can we?
Aug 3, 2012 3:34PM
avatar

What this tells me:

 

1.) manipulation

2.) horrendously lousy math and stat skills.

3.) more hype

4.) more job turnover with a net loss

5.) the fascist elite are getting nervous.

 

In the meantime cities go bankrupt in the midst of all this job creation?  Deficits continue at all level of government...??   WTF..???

 

Who are these clowns trying to BS?

 

Once again...no sooner than there is even a smattering of good news, accurate or not, up go oil prices.  Rest assured we will be in yet  another downturn...give it a few weeks

Aug 3, 2012 1:06PM
avatar
We need fulltime employment not SEASONAL , BOTH parties suck at doing this because BOTH want the other to look as bad as the other when they are incapable of doing the job we hired them to do except point fingers an call each other names like little third graders !!!!!!!!  GROW UP AN DO THE JOB WE GAVE YOU OR HIT THE ROAD !!!!!!!
Aug 3, 2012 3:40PM
avatar

Ok, so who is/was a better president:

 

Bush - Thumbs Up

Obama - Thumbs Down

 

Mine's Obama.

Aug 3, 2012 2:51PM
avatar
Why is this good news. Yes, we added more jobs than we have in the past few months, but the total percentage of the unemployed still increased. This means even though we increase the number of jobs added, even more were lost. The president doesn't deserve another term in office, not because he is a democrat, but because of his handling of the economy. He is clearly in over his head. We have had 2 nearly 1 trillion dollar stimulus packages (yes one was while bush was in office) and they barely made a dint. Obviously the answer isnt to spend money to get the economy going, but that's all he knows how to do.  
Aug 3, 2012 1:43PM
avatar
Who in the h*ll is putting out this crap. Unemployment just went up with Julys numbers to 8.3%. Oh yeah, real unemployment is actually double that. Black unemployment above 30 years old is 20% or higher and below 30 it is over 50%. VOTE OBAMA for four more years of this sh*t.
Aug 3, 2012 1:38PM
avatar
This is just more lies.  Job growth is stagnant and unemployment is up to 8.2%.  The stock market is just like my teenage daughters friends.  They would party over a fart!
Aug 3, 2012 3:22PM
avatar

{ QUOTE} Crude oil rose $4.19 to $91.32 a barrel on hopes that the jobs report meant a stronger-than-expected economy. Brent crude was up $2.84 to $108.74.

 

Sure as hell don't need facts when you can make more money on "HOPES"................and "IF"  it were a fact let's MANIPULATE GAS AND OIL back up to put the economy and the working AMERICANS back where we want them............................STRUGGLING!!!!!!!!!

 

Bet BIG OIL and PAID OFF POLITICIANS will party tonight and just laugh and say "IT SURE SUCKS TO BE THEM" ................................GO FIGURE!!!!!!!!

 

Replace

All

Incumbent

Politicians................................R.A.I.P. THEM BACK!!!!!!!!!!!!

Aug 3, 2012 1:25PM
avatar
What a farse this sham article is! On Yahoo an article said overall unemployment went up a couple of tics....MSNBC...will do anything to prop up the current regime....MSNBC You Stink!
Aug 3, 2012 1:25PM
avatar
The president just spoke in the last hour. Taking credit for the employment growth. I know I'm happy my 21 year old just got a min wage job - she is one of those 160k. She lives at home still. Maybe they can post, how many jobs at min wage/ part time - and maybe how many of these folks are living at home.
Aug 3, 2012 2:46PM
avatar
To be revised downward next week on  page 96 of your newspaper.  Like almost evry month once the market vultures have picked the news clean except for months the numbers are so bad they can't "seasonally adjust" or "birth death ratio" them into positive territory.  Been that way for several years so please the Obama lovers relax it's not an attack on the emporer, just the bogus counting system.  U6 (closer to reality but still fudged by those who lose benefits entirely) ) is 15%, that's the only number that really counts anyway, except on WS for manipulation purposes only.
Aug 3, 2012 1:26PM
avatar

unemployment over 15%

 

media zombies lies for the puppet campaign

Aug 3, 2012 2:19PM
avatar
WOW...so 163,000 make the Markket "soar"...then in 2 weeks they will come out & say the numbers were adjusted & it is really 85,000 jobs.  What a bunch of sh"t  but they accomplished what they wanted because with the falsified jobs info OIL jumped $4.00 a barrel on the news.  People are still struggling and any excuse that will raise OIL Wall Street will MANIPULATE!!!!  So the price at the pump will jump 20 cents on Monday & the 163,000 jobs that are probably at minimun wage will have no problem paying $4,00 a gallon. Great job by Wall Street & Government...I hope you choke on your Brent Crude. 
Aug 3, 2012 1:01PM
avatar
Does the market have rocks in it's head?  The last 2 fridays the dow saw triple digit gains then remained flat the following week until losses in mid week. And how can they get all jacked up about the jobs report when unemployment went up. MSM again not giving the whole story, The only people I know making a living are those in the public sector or those in the high end sales areas. The wealthy will always spend but the rest of America is holding on tight waiting for the next shoe to drop.
Aug 3, 2012 1:03PM
avatar

The official jobless rate is a calculated fiction subject to election-year wishful thinking and about as trustworthy as the LIBOR rate! The official jobless figure is calculated from people just now filing for unemployment and people still receiving such benefits and looking for work. But it does not include the 86 million Americans who have been looking for work so long they have exhausted all possible benefits. These are America's "invisible" unemployed, ignored as a major political embarrassment. The US government admits to there being 12.5 million "visible" unemployed, which together with the invisible means 94.5 million Americans are available to work but do not have a job. Total US population is 330 million. But 24% of those are young people not eligible to work. And 13 percent are retired. So the total population of available workers in the United States is 100% - (24% + 13%) = 63% of 330 million people, or 207 million workers. And with 94.5 million workers not working, the true jobless rate in the US right now is 45%, not the 8% the media keeps propagandizing you about. So why is the stock market up on a jobless claim that any reasonable thinker knows is a fraud? One clue lies in this analysis which shows that transport stocks should rise and fall along with the Dow. But they are not. Hence the Dow, like IBOR and like the jobless figures, is subject to manipulation and fraud. It is ALL an illusion.

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