Stocks rise on jobs, factory data
Jobless claims climb less than expected, and US factory orders fall less than forecast. The ECB holds rates steady as Draghi says the ECB is ready to buy bonds. Google warns of more cuts at Motorola. Facebook now has 1 billion active users.
U.S. stocks mostly added to gains Thursday after jobless claims rose less than expected and factory orders fell less forecast. Adding to optimism was the European Central Bank President comments the bank is primed to buy bonds when necessary. Investors also await the minutes from last month's Federal Open Market Committee meeting. Tech, however, lagged the general rally as Hewlett-Packard, Facebook shares declined.
The Dow Jones Industrial Average ($INDU) was up 66 points at 13,561. The S&P 500 ($INX) was up 7 points at 1,458. The Nasdaq Composite ($COMPX) was up 1 point at 3,136.
Is Romney's strong performance driving futures higher?
Wall Street will also react to the first presidential debate Wednesday night, which ended with President Barack Obama and Republican candidate Mitt Romney discussing economic issues, including their views on Medicare, taxes, budget deficits and how to boost economic growth.
While nothing new was revealed in the debate, many pundits agree that Romney put on a strong performance. Some argue that this could have been driving stock futures higher.
In the end, it's all about jobs
The number of people who applied for U.S. unemployment benefits rose to a seasonally adjusted 367,000 last week, the Labor Department said Thursday. Economists had expected claims to rise to between 365,000 and 370,000, according to different estimates.
Initial claims from two weeks ago were revised up to 363,000 from an original reading of 359,000, based on more complete data collected at the state level.
The four-week average of new claims, considered a better gauge, as it smooths out volatility, was unchanged at 375,000.
The number of planned layoffs at U.S. companies in September rose 4.9% after hitting a 20-month low in August, according to consultants Challenger, Gray & Christmas. Despite the relative increase, the latest reading marks a 15-year low in planned job cuts announced for the month of September.
On Wednesday, stronger-than-expected jobs figures and activity in the services sector helped offset weak data in Asia and Europe as the Dow industrials managed to climb 12.25 points to 13,494.61.
The different employment reports come ahead of Friday's all-important nonfarm payrolls data. Economists expect 120,000 jobs were created in September, according to Briefing.com, and the unemployment rate to remain steady at 8.1%.
Factory data and the Fed minutes
Orders placed with U.S. factories fell 5.2% in August -- the most since January 2009 a, signaling that slowdowns in business investment and exports restrained the economic expansion. Economists had predicted a fall of 6%, according to Briefing.com. The Commerce Department also revised July's 2.8% increase down to 2.6%
Factories are feeling the effects of Europe's economic troubles and the slowdown in growth in China and other Asian markets. In addition, concerns about the U.S. fiscal cliff of tax increases and government spending cuts set for January also are putting the brakes on business investment, which has been a mainstay of the expansion, Bloomberg reported.
At 2 p.m. ET, the Fed will release the minutes from its latest policy meeting on Sept. 12 and 13, when the bank announced its third round of quantitative easing.
Asia reacts to debate, while Europe slightly higher on Draghi
Asia stocks closed mostly higher, led by Japan, as exporters got a boost from a weaker yen. Many analysts suggest Asian markets were reacting to advancing U.S. stock futures as Romney performed well in the debate.
Meanwhile, both the Bank of England and the European Central Bank left key rates unchanged. ECB President Mario Draghi said the bank is ready to start buying government bonds as soon as the necessary conditions are fulfilled by any countries needing assistance. This, he said, has already calmed financial markets.
Draghi said that European growth is expected to remain weak and recover gradually. Yet he repeated that the euro is irreversible and that risks are on the downside and should be contained by effective policy action.
Draghi added that while there's been significant progress in Spain, many challenges remain. Investors await to see when Spain will ask for aid, triggering the ECB's bond-buying plan. European markets were slightly higher Thursday.
Retailers report September sales
U.S. retailers will be in focus Thursday, with many reporting same-store sales for September. In general, September sales looked solid, not stellar, Reuters reported, after the back-to-school shopping season and ahead of the holiday season.
Gap's (GPS) September same-store sales increased by 6%, ahead of the estimate of 5.4% in a survey of analysts by Thomson Reuters. Macy's (M) reported same-store sales increased by 2.7%, below growth estimates of 3.3%. Kohl's (KSS) September sales fell 2.7%, while analysts expected a drop of just 0.2%.
Stocks to watch
Facebook (FB) shares rose as the social network reached a milestone of 1 billion active monthly users.
Google (GOOG) expects to expand job cuts at its Motorola Mobility unit beyond previously announced U.S. cuts. The company will take a $340 million third-quarter charge in severance and other costs.
Shares of NuVasive (NUVA) sank, continuing sharp losses from late Wednesday after the medical device company cut its quarterly sales outlook.
Applied Materials (AMAT) will take $180 million to $230 million in charges before taxes as it reduces its global headcount by 6% to 9% -- 900 to 1,300 positions. The cost savings will help the company fund its key growth initiatives.
I'm off to go heckle Obummer at his rally at Sloan Lake. Here's some tweets I copied and pasted from another website, discussing the brown clown's sad performance last night. For your reading amusement.....
*This is a businessman, talking business, to a grad student. Obama should be taking notes and asking for an extension.
*Media coddled Captain Precious, and are now sad he got stomped. Sometimes beta males need to fight.
*Watching MSNBC discuss the debate is like watching the Titanic discuss the iceberg.
*Obama is rolling down a mountain like Homer Simpson hitting every rock along the way.
*Obama is now like a Best Buy employee trying to sell you something he cannot fully explain.
I watched the debate all the way through last night. It is painfully obvious that even President Obama cannot list or explain the things that have made you so "happy" over the last 3.5 years. So, if he can't explain, I'll withdraw my request for you to do it.
Sorry lefties, Romney won that round. ABS will be in fine form today I'm sure, he gets to until the next debate.
Obama now needs to tell us why he needs to be prez for 4 more years, he didn't make the case as to what he still needs to do. Many of us here have posted what he needs to do and he has said it before but he did not articulate well during that debate. He had the election won, narrowly, now it is game on again. He seemed completly uninterested in even being there and you would think enthusiasm would be important for a president.
At least there was a lot of substance in that debate, very encouraging.
incredible , exactly what we have been saying for 4 years.
He's a fraud, can't speak without being told what to say , can't work away from his canned phrases.
Kept repeating the same lie about $5 trillion in tax cuts .
Romney looking at him like he's purple and saying 4 times I never said that.
Obuma was lost.
Smirking , eyes down, the look of a defeated, loser. Romney clearly intimidated him
He's not used to getting smacked around and it showed.
Don't you know he's the smartest , most talented guy in the room?
We do have his college transcripts to prove that riiiiiiight ?
Is there any common theme , here ?
As strong as Romney looked last night I don't think we have yet to see his strongest quality. He will bring; of course hoping and if he is elected, many many very smart and dedicated business people into his administration and this will benefit all of us. I believe only 8% of the present administrative slots have folks with any private sector experience. Not too much difficulty understanding how this present clusteref of beaucrats have managed to creat so much chaos. But man the time and money wasted to prove to all of us they have no clue. Very Very sad.
He took it to this empty suit and slapped him around like the amateur , former community organizer, he is !
When you back out the teleprompter, the canned phrases and the swooning base of Obama free phone "ladies" , he's got nothing . No game at all !
It was a man against a boy !
Yes, tell me again what a shew in Obuma is ?
Even Chris Matthews was ranting "Where was Obuma last night" ?
uhh looking down, smirking and getting his a$$ whipped !
I hope some of you caught what Mitt said about taxes. He repeated it three times that he won't cut the taxes of the RICH. What he will do is cut the taxes of the non-rich ( less than $250K?), but he'll eliminate some deductions to make the tax cut revenue neutral.
So you might ask what is the purpose of a revenue-neutral tax cut? This is where Mitt's business expereince showed. Small businesses, which create most of the jobs in this country, are taxed at the personal rate (not the corporate), so the tax cut will benefit small business and in turn help create jobs.
These are the kind of ideas that help restore business confidence and be a start to turn this economy around. Remember most people in this country want a job not welfare!
Right on Mitt!
Obama had a lot to be ashamed about, $90,000,000,000 given to so called green companies, over 50% political contributors and money bundlers, who set up companies that went out of business when the checks cleared the bank. Obama's eyes were cast down and many times he displayed the stupid looking tell tale grin that says, you got me. I kept thinking of the lyrics from Cage The Elephant,
"In my past, bittersweet,
There's no love between the sheets,
Taste the blood, broken dreams,
Lonely times indeed,
With eyes cast down,
Fixed upon the ground,
Eyes cast down".
"Trickle down government isn't working"
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