By Jonathan Cheng
Investors dove back into the stock market Wednesday despite some
gloomy jobs data, jumping into September on a bullish note
following a brutal August.
The Dow Jones Industrial Average (DJI) gained 124 points, or
1.3%, at 10140 in early trading, while the Standard & Poor's
500-stock index (SPX) added 1.4% to 1064 and the Nasdaq Composite
(RIXF) rose 1.6% to 2147.
The strong start to the morning follows a dismal month that saw
the Dow drop 4.3%, its worst August in nearly a decade.
It also comes in spite of a deflating jobs report, which showed
private-sector employment falling by a seasonally-adjusted 10,000
jobs in August, a surprise contraction that is the first in six
months. Economists had been expecting a gain of 17,000
private-sector jobs.
Investors have been closely scrutinizing recent employment data,
searching for evidence of a continuing recovery. On Friday, the
market will be awaiting official monthly nonfarm-payrolls data,
which include both private and public sector hiring.
On Wednesday, investors were also looking for manufacturing and
construction spending data. In the early afternoon, Richard Fisher,
president of the Federal Reserve Bank of Dallas, is scheduled to
speak on the economy. Car-sales data for August will also be
reported during the session.
Investors will also be keeping an eye on retailers after
MasterCard Advisors, which crunches data from credit cards, checks
and cash payments to form sales estimates, said sales numbers were
far short of 2008 levels for the critical back-to-school shopping
season. Wal-Mart Stores (WMT) gained 0.8% and Target (TGT) advanced
1.2 in early trading%, while JC Penney (JCP) and The Gap (GPS)
gained 1.8% and 2% respectively.
On the corporate front, Burger King (BKC) surged 14% after the
Wall Street Journal reported the burger chain is in talks with
private-equity firms about a possible sale, citing unnamed
sources.
Apple (AAPL) rose 1.8% as the tech giant prepared for a news
conference to unveil new products.
Borders Group (BGP) edged up 0.9% even as the bookstore chain
operator reported a wider loss amid sales pressure and squeezed
margins.
H.J. Heinz (HNZ) slipped 0.1% after reporting a 13% increase in
earnings as the food-processing company benefited from continued
growth in emerging markets, though revenues disappointed.
Asian shares posted gains overnight, buoyed by encouraging
manufacturing data from China and better-than-expected growth in
Australia, which allayed some near-term worries about the global
economy.
In Sydney, the S&P/ASX 200 index rose 2.1% after gross
domestic product rose a better-than-expected 1.2% in the second
quarter from the first quarter. European shares also gained, with
the Stoxx Europe 600 index rising 1.3% in intraday trading.
Treasurys fell broadly, with the yield on the benchmark 10-year
note (UST10Y) rising to 2.53%.
In the currency markets, the euro rose 1.2% to $1.2833. The U.S.
Dollar Index (DXY), which tracks the performance of the greenback
against a basket of six currencies, fell 1.1%. The Bank for
International Settlements reported that daily turnover in the
world's foreign-exchange markets has soared to $4 trillion this
year.
Commodity prices rallied, with October crude-oil futures gaining
1.4% to nearly $73 a barrel, ahead of official oil inventory
numbers slated for 10:30 a.m. EST. Oil prices tumbled in August
amid growth concerns and unusually high inventory levels. Copper
futures rose more than 2%.