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 11:26AM
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I don't see any improvement in the economy for several of our small buisnesses, only for the big box stores that people choose to keep supporting! thanks America.
Oct 4, 2012 11:25AM
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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.

Oct 4, 2012 11:24AM
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Is anyone else anticipating the VP debates as much as I am?

 

I predict the DOW up over 100 pts the next day.........

 

It should be a good laugh, Biden acting a fool and Ryan trying to take it easy on the mentally hadicapped old coot!

Oct 4, 2012 11:23AM
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Jobless claims RISE!. less than expected. US factory orders also FALL! less than expected. 

Good news yay!

Maybe the debate is why we are up. no?
Oct 4, 2012 11:23AM
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Market shoots up on HOPES of new administration.
Oct 4, 2012 11:22AM
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Romney avoided the toughest questions: How to make his plan work without hurting the middle class.
Oct 4, 2012 11:21AM
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ABS you clearly can't read. 

First I concede the point that Romney won the debate yet you still attack me.

2nd you call me a paid poster 24/7, first you will see I have not posted on  a weekend or in the evening even once.  You say what reason do I have to watch the debates?  How about the same reason millions of people around the world do, USA is still the largest economy and military and the direction it takes is important to everyone.  As a Canadian it is our largest trading partner and you know, next to us.  I have posted that multiple times so read it and understand it if you are capable.

Oct 4, 2012 11:19AM
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As usual the millions of parasitic TV political analysts are picking over the bones of the debate, telling us who won, discussing in great detail the facial expressions of the two candidates. Why can't they just all shut up. They don't know any more than we do. In fact, our opinions are far superior if only because we're not rotten paid schills. 
Oct 4, 2012 11:19AM
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Whack Job Wrote:

Romney destroyed Obama in the debate, and the markets are flourishing because of it!  Obama's house of cards is tumbling as we speak..........--------------------------------------------------------------

 

So let's see stocks have been hitting record highs sense President Obama was elected but today it's because of Romney.

 

ROTFLMAOAY

Oct 4, 2012 11:18AM
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The economic data that dribbles out each day most of the time is insignificant importance. Markets are mainly driven by emotions. When trader and investors (are there any left?) feel good, makets reflect it. Same thing when they feel bad.

 

I can predict the future too of the debates. Mitt will win them all. You know he'll be prepared with the data, facts, and detailed answers. Obama just doesn't have the intellect  to successfully debate Romney. All he has to fall back on is some canned flowerly crap probably about the repressed minorities!

 

Biden is a loud-mouth hot head, and I'm sure Paul will irritate the piss out of him. Joe will probably have a heart attack. Good!

 

Go Paul go, Biden blows!

Oct 4, 2012 11:18AM
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It´s just the old same manipulation from a small group of crooks. Draghi wants to control the situation just by using words, Europe has no concrete solution for its crisis.
Oct 4, 2012 11:17AM
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Please, will you ask Rick Santelli to lighten up ... I am sick of his angry outbursts.  What an angry, little man he is ... sheesh!
Oct 4, 2012 11:16AM
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V_L: "If we started a PARIAH TAX on financiers, investors, day-traders, law firms, and hired-in executives... we could........FUND A FAILING MEDICARE AND SOCIAL SECURITY PROGRAM?

 

How about we fund NECESSARY programs, NOT channels the vast majority do not watch?

 

If you are strapped for cash, do you sell your car to pay the mortgage, or the cable bill????????

 

PRIORITIES, PRIORITIES.......  America doesn't have an income problem it has a spending and priorities problem!

Oct 4, 2012 11:16AM
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As a retiree, I don't much care what the tax rates are or what it is spent on as long as I keep getting my SS and medicare as is. And despite the ranting here. BOTH SIDES say no change for me. I'm finding it hard to find a reason to even bother voting since I have utterly nothing at stake here. I'm not in the game so why play. If someone 20- 50 is happy getting a voucher for medicare instead of what I have, so be it. If not YOU stand up and fight, all I am going to do is give you lip service from now on

 
Oct 4, 2012 11:14AM
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The debate showed one thing...

Obama is arrogant, lazy, corrupt and CLUELESS.  He has no plan.  He has no details, because he has no plan.

If Obama is re-elected expect unemployment to top 10% before hes gone.  The deficit to reach 22 Trillion, and America to be the laughing stock.  Gasoline should reach Obama's $5 next summer.  

We need leadership, and all Obama can do is mumble about taxing the rich to have even more wasteful government spending...

Sha na na na, hey hey good bye, '57 States'...  you and the White Sox both choked...
Oct 4, 2012 11:10AM
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Obama speaks in a ration of 1.5:1 to Romney's time during the debate, yet still loses badly.

 

The more Obama rambled the less sense he made, and Romney sat back and watched Obama ramble and stumble along.......'

 

How many times did Obama jump the issues, especially when the economy was the main issue?

 

Romney destroyed Obama in the debate, and the markets are flourishing because of it!  Obama's house of cards is tumbling as we speak..........

Oct 4, 2012 11:10AM
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"V_L why should we BORROW from China, with interest, to keep Big Bird on television again?"

Agreed. If we started a PARIAH TAX on financiers, investors, day-traders, law firms, and hired-in executives... we could just pay cash. Recover JOBS, eliminate JOB TERMINATORS.
Oct 4, 2012 11:08AM
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Stocks rally on jobs yet Google warns of more job cuts at Motorola. Once again Wall Street missing the big picture. Temporary, seasonal, minimum wage jobs are not going to help your markets all that much kids. Been to Walmart lately? Already have their X-MAS displays up. Also I guess Obama is lost without a teleprompter and probably isn't used to having people criticize his failures of a president to his face but then again most narcissistic, egotistical people don't like it when they are told they kinda suck.  Romney 1  Obama 0
Oct 4, 2012 11:07AM
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"So you might ask what is the purpose of a revenue-neutral tax cut? This is where Mitt's business experience 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."

Obama cut small business taxes EIGHTEEN times already. So Romney doesn't add up again. The jobs need RECOVERING not creating and hired-in executives who have turned American business into an administrative failure need to be flushed out and banned from wages they don't create as business owners. Obviously, the most important thing America has to do is stop acknowledging consulting, financial (gambling) and law firms as businesses. They need to be categorized separately and taxed accordingly. If you are taking FROM the economy, your TAXES need to be nosebleed high.
Oct 4, 2012 11:07AM
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For all the "politicos" on here.................the fact is, IT DOESN'T MATTER WHO WINS............WE'RE ALL FVCKED. 

 

"It's the worldwide economy stupid"!

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