Wall St rises after strong jobs data
THE creation of three times as many private-sector jobs as expected turned Wall Street’s early losses into gains yesterday, extending a rally investors worried had come too far too fast.
Financial stocks led gains, helped by credit-card companies such as Capital One Finance, which rose 4.2 per cent to $45.52. The S&P consumer finance index, which includes major personal finance companies, gained 2.8 per cent.
The jump in private payrolls to nearly triple the forecast, comes two days ahead of the government’s labour report.
Economists boosted forecasts for Friday’s payroll growth.
“The economy is clearly accelerating,” said Edward Hemmelgarn, president of Shaker Investments in Cleveland. “It’s difficult to make the case for the market to go down in the first six months of the year.”
Trading volume has picked up sharply after the two-week holiday period, showing participation in the latest stage of the rally although many indicators are pointing to a market that may be reaching the top of its recent trading range.
The Dow Jones industrial average gained 31.71 points, or 0.27 per cent, to 11,722.89. The Standard & Poor’s 500 Index rose 6.36 points, or 0.50 per cent, to 1,276.56.
The Nasdaq Composite Index added 20.95 points, or 0.78 per cent, to 2,702.20.
US private employers added 297,000 jobs in December, a report by the ADP Employer Services showed, which was nearly three times what economists forecast and the biggest jump on record for ADP, which has data going back to 2000.
Employment agency Monster World Wide rose 3.6 per cent to $25.03. The stock has surged more than 73 per cent since the end of October after rising sharply ahead of the stronger-than-expected payrolls data for that month.
The encouraging data also lifted housing stocks. The PHLX housing index rose 1.8 per cent, with homebuilder DR Horton among top gainers, up 3.2 per cent to $12.40. Weakness in housing has been a major drag on the economy.