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.

By Melly Alazraki Oct 4, 2012 9:18AM
stock marketLast updated 12:01 p.m. ET

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.


Already, Costco Wholesale (COST) reported a 6% gain for September same-store sales and an 8% rise for total sales. Target (TGT) reported a same-store-sales rise of 2.1% in September.


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

Hewlett-Packard (HPQ) edged lower after falling 13% Wednesday on a disappointing 2013 earnings outlook.

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.
320Comments
Oct 4, 2012 12:00PM
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 Let me put it another way. If four years from now the US says it made a mistake in electing Mitt, I am going to vote for him just out of spite
Oct 4, 2012 11:59AM
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The funniest point of the debate was when Obama tried to slam Romney on wasting investment money, and Romney responded with

"You mean like you spent 90 Billion on green energy, and half are already bankrupt? Most people, when they invest, pick some winners, and some losers. You seem to go after only losers."

That would have been a good time for Romney to add; Take Biden for example!  hehe

That pretty much sums things up..........
Oct 4, 2012 11:59AM
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I noticed ONE thing Romney did not flip-flip on:

FREE trade agreements.

FREE (not fair) trade agreements only help investors in other countries and the companies that set up shop there. They do not help middle class Americans except to give us more variety of CRAP at WalMart. FREE trade can hurt American jobs.



Oct 4, 2012 11:55AM
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Brutus625

I feel the same way. Something just isn't right here.

EVERYONE needs to see these two videos:

"Fall of The Republic" part one and part two, and the "Obama Deception".

They will scare the H*ll out of you, but seeing what's going on around the world and in America today it's hard to dismiss the evidence that they bring out...

 

Oct 4, 2012 11:55AM
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Comming to a city near you. Wake up america.

Oct 4, 2012 11:53AM
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 Your last chance with me America. You elect Mitt and then 4 years later say we made a mistake when less than half the jobs he promised were created, instead of saying welcome aboard I will say too late , idiots, up yours instead because I have had it with your stupidity. You made your bed, lie in it
 Not to mention a new ground war in Iran when bombing fails to take out their nuke plants and gas soars to $6 as a result
Oct 4, 2012 11:53AM
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Tumbleweed said;
"Frankly ABS I don't think Obama made any major mistakes at all last night and Mitt came across as non telegenic as usual. Let's just wait and see what the Swing State new polls bring"

In reality, you're probably right about Obama not making mistakes. He never had a chance. Romney pretty much shut him down completely.

Even most of the left wing pundits are saying that. Maybe they should hire you to spin it.
Oct 4, 2012 11:49AM
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Blue team red team. This has been manufactured to get us to hate each other.

Our system has failed!! We will need to come together and start over with a truly representitive government once the dollar collapses.

Oct 4, 2012 11:44AM
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 Frankly ABS I don't think Obama made any major mistakes at all last night and Mitt came across as non telegenic as usual. Let's just wait and see what the Swing State new polls bring

 Just remember, you were soooo damned certain the Supreme Court would find Obamacare unconstitutional because the " logic" was there
Oct 4, 2012 11:43AM
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I didn't watch the debate last night and frankly I don't give a crap who allegedly won or lost, especially since I won't be voting for either of these big government progressives.  However, all you Romney supporters may want to re-consider your enthusiasm about your boy's performance last night. 

Consider this - Chris Matthews, Ed Schultz, Bill Maher, Michael Moore, the Huff Post just to name a few, are all allegedly "really worried" based on Obama's performance.  Really?  Apparently all the Dem talking heads are allegedly down in the dumps about Obama now.  Doesn't this sound suspicious?  If you have all the Dem journalists allegedly lined up and lamenting the performance of their guy, something just isn't right.  None of this is adding up. 

As incompetent as he is, there's no way Obama did THAT poorly last night.  And if he did, there's no way all his backers in the MSM would legitimately respond like they have.  Warning bells and sirens are going off big time right now.  Are you listening?  Not everything is as it appears.  And there's no way you can convince me that all this alleged sadness and lamentation on the part of Dem pundits last night isn't part of some ploy or strategy.  If you are buying into their despair, you're a sucker.
Oct 4, 2012 11:43AM
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I see the Obama haters are out in full force today.If Obama would have handed everybody

in the country a milliom bucks out of his own pocket they`d complain.

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Claims from last time were adjusted up.  WHAT A SURPRISE!

Oct 4, 2012 11:42AM
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This election is irrelevant. Does not matter who wins. The dollar and bond markets are toast. All this election is going to decide is who will be in office when the global finacial collapse hits. Stock food, ammo and pray. Austerity in Spain are sparking huge riots. (why in our media not covering this) Once we read about austerity in USA. The guns will come out.
Oct 4, 2012 11:41AM
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El Retardo committed suicide last night when he found out Mitt was going to take him off the dole and give him a job!

 

Har har har!

Oct 4, 2012 11:38AM
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Interest rates can´t be kept at zero for a long period of time without causing big damage to the economy. It´s a basic principle of economics that money has to be remunerated for time, otherwise saving loses any meaning. Bernie is what they call an "academic", but in reality he is just a mistaken one. Correlation between interest rates and growth is not linear.
Oct 4, 2012 11:38AM
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 I remember a car ad where two young dudes take their 4x4 to the top of a mountain to dump gramp's ashes in his beloved wilderness. So much for leaving things for the next generation
Oct 4, 2012 11:32AM
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WASHINGTON (Reuters) - The number of Americans filing new claims for unemployment benefits rose only slightly last week after a big drop the week before, keeping in place a trend that suggested a mild improvement in the labor market.

Traders, please take notice!!!
Oct 4, 2012 11:31AM
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I like it when the market goes up!

 

Imagine what it will be like with a president Romney? I expect a 1,000 point up week!

 

Har har har!

Oct 4, 2012 11:26AM
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 Which side has the policies that will make my gold go up in value. That's who I want to vote for because, like you, I vote my pocketbook. And I simply don't believe you when you say inflation will negate any gold gains
Oct 4, 2012 11:26AM
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If Romney wins, Bernie is gone. Then we see if interest rates will be at zero until 2015... Bernie must go!!!
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