Markets

Stocks gain on ADP jobs report

Stocks are rallying after ADP's jobs report missed estimates.

S&P 500 futures are up 0.9 percent, adding to earlier gains, while most of Europe has advanced more than 1 percent on strong earnings. Asia was mixed overnight, with Shanghai down 1.6 percent but Tokyo and Mumbai up about 0.5 percent.

The private sector added just 185,000 jobs last month, less than the 220,000 gain forecast by economists. Payrolls company ADP also revised June's reading down by 8,000. The June trade deficit also widened more than expected and mortgage applications rose 4.7 percent thanks to higher refinancing activity.

The S&P 500 is in the middle of its range and has straddled both its 50- and 100-day moving averages for the last two sessions. Investors have waited for indications on when the Federal Reserve will raise interest rates, though recent economic data has reduced the case for such a move. That heightens the importance of Friday's key non-farm payrolls report by the Labor Department.

In company-specific news, Priceline.com rallied 7 percent on strong quarterly profit. Walt Disney, however, dropped 6 percent after missing revenue forecasts and lowering guidance for its cable networks. Zillow is up 12 percent on strong top- and bottom-line results.

Consumer-related names, especially e-commerce companies and housing stocks, have been among the best performers lately. Utilities and real-estate investment trusts have benefited from lower interest rates, and cheap oil has lifted transports. Semiconductors, solar energy, oil drillers, and metals have fared the worst.

The weak ADP number is helping commodities. Oil rose about 1 percent and is trying to hold its ground following a sharp selloff in July. It could be affected today by the release of inventory data by the Energy Department at 10:30 a.m. ET. Metals inched higher and are now little changed.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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