Stocks higher as jobless rate falls to 7.8%

September unemployment declined to nearly a 4-year low as employers added 114,000 jobs. Zynga shares continue to tumble. Facebook shares fall on Zynga concerns. Avon's former CEO steps down as executive chairman.

By Melly Alazraki Oct 5, 2012 9:12AM
stock marketLast updated at 12:18 p.m. ET

U.S. stocks eased off earlier highs that sent the Dow industrials to a five-year high. Markets rallied Friday as the government's nonfarm payrolls report showed the unemployment rate unexpectedly fell from 8.1% in August to 7.8% in September, the lowest level since January 2009 -- when President Barack Obama took office.

The Dow Jones Industrial Average ($INDU) was up 59 points at 13,635. The S&P 500 ($INX) was up 5 points at 1,466. The Nasdaq Composite ($COMPX) was up 2 points at 3,152.

Economists had predicted the jobless rate to remain at 8.1% or tick up to 8.2%, depending on the survey. The rate declined as many Americans returned to the workforce to look for work.

The report also showed that employers added 114,000 jobs in September, largely in line with expectations. Economists surveyed by predicted the U.S. would gain 120,000 jobs last month, although a Reuters survey had economists forecast 113,000 jobs. Employers took on part-time workers.

Also, employment gains for August and July, meanwhile, were revised higher. The number of new jobs created in August was revised up to 142,000 from an original estimate of 96,000. July's figure was revised up to 181,000 from 141,000.

While the addition of 114,000 jobs is not enough to show healthy growth in the job market, together with the upward revisions for the previous month it at least shows that the growth is not slowing, as many economists had feared, and that the jobs market is continuing to recover. The positive jobs reports, pundits said, could help Obama's re-election bid.

Europe rallies on US jobs data
European stocks rallied Friday after the release of U.S. nonfarm payrolls. Earlier, stocks also reacted to comments by European Central Bank President Mario Draghi about the bank's readiness to tackle eurozone problems.

Two of Greece's biggest banks, the National Bank of Greece and Eurobank Ergasias, are in merger talks to create the country's biggest lender, banking sources said Friday. The bourse suspended trading in the shares of the two lenders, pending official announcements, Reuters reported.

Asian stocks ended higher Friday in anticipation of the all-important U.S. jobs report. Meanwhile, shares in Tokyo saw a brief turn lower after the Bank of Japan refrained from announcing new monetary easing.

In the US
U.S. stocks rose Thursday for a fourth consecutive day of gains in the S&P 500 as weekly jobless claims data reinforced hopes that nonfarm payrolls data would meet forecasts. Draghi's comments added to optimism as well. The S&P 500 has climbed 16.2% so far this year and may hit a five-year high Friday.

Also, the debate Wednesday night between Obama and Republican challenger Mitt Romney may have affected stocks as polls showed a majority of viewers saw Romney, who has trailed Obama in national and swing-state surveys, as the debate winner.

Later in the day, the Federal Reserve will release data on August consumer credit, which is expected to have expanded by $5 billion, according to a survey of analysts by

Stocks to watch
Shares of Zynga (ZNGA) continued to tumble after the social-gaming company cut its full-year outlook and said it wrote down part of a recent acquisition. Shares of Facebook (FB) also fell Friday, as the site features games made by Zynga.

Morgan Stanley (MS) is reportedly in talks to sell a majority stake of its commodities-trading unit to Qatar's sovereign-wealth funds as a way of sidestepping upcoming regulations.

Constellation Brands (STZ) reported that its fiscal-second-quarter profit shrank by 23%, but it beat analyst estimates. The wine and spirits company also raised its adjusted income estimate for the year.

Avon Products (AVP) shares rose after the beauty company said Friday that Andrea Jung will step down as its executive chairman and member of the board of directors at the end of the year. Fred Hassan will become the nonexecutive chairman of the board.

Sprint Nextel (S) is considering making a rival bid for MetroPCS Communications (PCS), which on Wednesday agreed to a merger with Deutsche Telekom's T-Mobile USA, according to people familiar with the situation.

A German court said mobile phone maker Motorola Mobility, part of Google (GOOG), did not infringe on a Microsoft (MSFT) patent that enables applications to work on different handsets. (Microsoft owns and publishes Top Stocks, an MSN Money site.)

Hertz Global Holdings (HTZ) extended its offer for Dollar Thrifty Automotive Group (DTG) to Oct. 22 after only about 24% of the rival car-rental company's shares were tendered. Hertz agreed to a $2.3 billion deal for Dollar Thrifty in August, ending a long bidding war with Avis Budget Group (CAR).

Curtiss-Wright (CW) shares fell after the company, which makes nuclear cooling pumps, trimmed its profit view for 2012 because of a strike that shut down one of the company's plants.

Oct 5, 2012 9:54AM

Curious timing and I'm suspicious. Frankly the 114,000 added jobs is not a very good number for any type of economic recovery. Even adding the "revisions" to earlier numbers doesn't make those numbers very good either. Yet the unemplyment rate drops .3 pts? The numbers don't add up unless more people dropped out of the workforce because they've given up looking for work. The business news networks are skeptical as well. 

Oct 5, 2012 9:54AM
Yes, nothing says economic recovery like not counting as many of the unemployed as you did last week.
Oct 5, 2012 9:59AM
Like Jack Welch said.  "You can't debate, so "change the numbers" Unbelievable numbers.  Will washington ever tell the truth?  Politicians and diapers have one thing in common. They should both be changed regularly, and for the same reason.”
Oct 5, 2012 9:42AM

Do you suppose Obama had anything to do with the phoney jobs report? Duh.


Oct 5, 2012 9:52AM
OK....Very interesting.........all of a sudden this jobs claim.  Well I have 2 sons...........with degrees, that have been without a full time job for 4 years. One is working 2 jobs, after beiing downsized, and the other working 3 jobs!! LOL This media is UNBELIEVABLE!!  DON'T BE SUCKED IN BY THIS NEWS!!!  Is this what Obama refers to when he says spread it around? Not going to fly here!!!
Oct 5, 2012 9:39AM
It has become clear that the kool-aid drinking left has been correct all along - Obama really is the messiah;  Instead of turning water into wine, he turned a crappy jobs number into a huge drop in the UE rate.

Anyone see the tweet from Jack Welch?  "“Unbelievable jobs numbers..these Chicago guys will do anything..can’t debate so change numbers,”


Oct 5, 2012 10:10AM

So by adding 114,000 jobs the unemployment rate drops .3 %? Ol' Leroy claims to have added 5 million jobs to date.

Using his numbers not mine, by the .3% equals approx 1%,   He has decreased unemployment by 14-15%? The numbers don't add up. Something smells rotten.

Oct 5, 2012 10:39AM

It used to be that people with full time jobs, stay at home moms, just out of high school young people and retired folks took these seasonal retail jobs for the extra holiday cash. This money then ended up in the big spending push during the holidays.......Now people that used to make $40,000 to $60,000 stand in line for these jobs to put some grocries on the table.


I don't call that progress.

Oct 5, 2012 10:16AM
More BULL"S" unemployment rate at 7.8% numbers are rigged to feed the mindless masses before the election !  True unemployment rate at 22 % and counting !   SCREW THE PEOPLE IS THE PARTY OF CHOICE !
Oct 5, 2012 10:01AM
Yellow press.  toysrus just hired 45,000 christmas temps who will be thrown out on their ear come january.  the article does not say what jobs, but i do remember a story recently about toysrus.  So i would suspect that a good portion are lowes, walmart, home depot etc.  Course the article does not say permanent jobs. some probably  were.  but as usual its slanted. 
Oct 5, 2012 10:09AM
The U6 unemployment rate for September is 14.7, the same as August,
but it is lower than Jan 2012 which was at 15.1

The U6 unemployment rate counts not only people without work seeking full-time employment (the more familiar U-3 rate), but also counts "marginally attached workers and those working part-time for economic reasons." Note that some of these part-time workers counted as employed by U-3 could be working as little as an hour a week. And the "marginally attached workers" include those who have gotten discouraged and stopped looking, but still want to work. The age considered for this calculation is 16 years and over .
Oct 5, 2012 10:39AM

The sad part about the jobs report is that some people will actually believe it.  These reports are all subjective, manipulated lies all intended for those in control to put forth a message that things are better than they really are.  I also find it interesting that all of suddent as we get closer to the election we are now making adjustments to previous reports showing greater job improvment, lowe unemployment etc.  HMMM..a coincidence?  I think not.  Also..if you dig deep into the numbers many of the reported new jobs are part-time low wage postions with no benefits but of course our media and those in control will never say that in the headlines. Why don't we have a monthly report on how many jobs were eliminated?  Bottom believe what you want but the litmus test of our economy is for you to do your own homework as to how well things are and all you need to do is look in your own "backyard".  

Oct 5, 2012 10:41AM
The temp jobs of course will make the numbers dance, we are in service economy that only benefits the Large corps. with no regard for the working poor. Small business can not trickle down the work if they can't grow. We in America need to make a change in the system not just with the POTUS but with congress who will care about the PEOPLE!
Oct 5, 2012 9:39AM

. As Chavez, Putin, and other world socialists offer their endorsement of Obama, American citizens are being led to believe we no longer need job development.  The "new" unemployment number is as believable as Romney being a murderer, as Biden being an acceptable representative, and that this administration has any other goal than maintaining  their federal employment checks. Very Very sad. This Abhorent behavior; can you imagine how those who are unemployed, underemployed, and have all but given up must now feel, will deliver the knock out blow to this Administration.  They are no longer believable. As a zebra can't change its stripes this Administration can't cease creating folly  with their rhetoric.  Their message is now we no longer need a job creator in the White House, everything is fine, go back to sleep. Either I am getting too old or too cynical but I can not remember the American Dream being discounted to this low a level. I remember in the 60's the communist propaganda paper "TASS" delivering the "party" line.  Nobody in the USSR believed it, nobody in the free world believed it, and the chaos, derision, and disfunction that  became acceptable by the communist party was regarded as immoral by all free citizens.  I have said this many times.  How many despots in world history came to power promising to take from the rich and give to the poor?  And how many innocent lives were lost attempting to remove them?  We are there folks! 

Oct 5, 2012 9:28AM
finally a friday!  fall air happening.  will be a great weekend! 
Oct 5, 2012 9:52AM

"And now we have to put up with all the spin on both sides....About this. The Romney Camp is going to be eating Crow. The Obama Camp...Will be running around doing fist pumps and hi-fives....woooohoo​ooo!!"

The American in the middle just gets to be more impoverished. When we have to storm the Ivory Towers to end the control and manipulation it won't be pretty but it will for once Unite the Nation to purge it of paper pushing button pressing pariah. Andrew Dickson White: Fiat Money Inflation in France. We ARE the book now.

Oct 5, 2012 10:13AM
And now the Dow is up 66.6 points.  Good thing today isn't the 13th.
Oct 5, 2012 9:46AM
If the unemployment number is real, it's likely seasonal holiday jobs.
Oct 5, 2012 10:23AM
Just ask any American that is without a REAL job.....THEY will tell you what unemployment REALLY is! GO ROMNEY!!!
Oct 5, 2012 10:47AM

I have posted this in the past.......Obama is THE ONE, that is in bed with WALL STREET, NOT Romney!!!

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