Stocks Are Higher After Jobs Report - Download Free Phim, Nhac, Phan Mem, Karaoke

conmeo · #1 (**permalink**) 11-07-2008, 11:30 AM

Investors were not letting a barrage of grim economic news get them down.

After two days of heavy losses, shares on Wall Street bounced back on Friday, despite stark new automotive sales numbers and government data showing that unemployment has reached its highest point in 14 years.

The Dow industrials were up 173 points at midday, but still lower for the week after a two-day sell-off that sent the Dow plunging by nearly 1,000 points. The broader Standard & Poor’s 500-stock index was 1.9 percent higher.

Shares in America’s two largest automakers, General Motors and the Ford Motor Company, fell after announcing bleak third-quarter earnings reports. G.M. reported a $4.2 billion loss in the third quarter, and said it might not have enough cash to make it through the year. Ford reported that its automotive business lost $2.9 billion last quarter, and said it was slashing capital investment and salaried payroll.

Also Friday, the Labor Department reported that the economy had lost 240,000 jobs in October, lifting the unemployment rate to 6.5 percent, from 6.1 percent. Including sharp revisions to August and September, the economy has lost more than 650,000 jobs in the last three months and 1.2 million this year.

“The market isn’t the economy, that’s basically what’s happening here,” said Alan W. Kral, managing director at Trevor Stewart Burton & Jacobsen.

Analysts said the markets had skidded Wednesday and Thursday as investors hunkered down for the release of the jobs report. They attributed Friday’s rebound to unemployment numbers that, while grim, were not cataclysmic, and said buyers were creeping back into the markets.

“Even though the number was worse than expected, in some ways you could almost say that was being built in,” said Sam Stovall, chief investment strategist at Standard & Poor’s Equity Research. “I think that maybe we overdid it in the near term, the anticipation being, ‘Oh my gosh, it’s Armageddon all over again.’ ”

The jump in unemployment, coupled with slumping retail sales and falling home values, foretells a broader economic slowdown that could last well into 2009, economists have said. On Friday, President Bush warned that the employment numbers were a symptom of America’s broader economic woes.

“We are in the midst of a global financial crisis, and tight credit markets have made it harder for businesses to borrow the money they need to meet their payrolls, grow and create new jobs,” Mr. Bush said in a statement. “It will take time for these measures to have their full impact on an economy in which many Americans are struggling.”

But analysts said that, with the presidential election over, investors are paying little heed to Mr. Bush’s statements, and instead focusing on President-elect Barack Obama as he plans his transition and begins selecting members of this Cabinet.

Mr. Obama is set to give his first post-election news conference Friday afternoon, and Mr. Kral said investors wanted to hear Mr. Obama make some concrete statements about his economic plans.

“All of the other issues are off the table,” Mr. Kral said. “That is the issue he won and ran on. If he were to come out and speak platitudes, there would be a problem. I don’t think there needs to be a lot of meat on it, but there should be some meat on it.”

In Asia on Friday, stock markets delivered a mixed performance to cap a mixed week, as investors digested the implications of the latest interest rate cuts in Europe and South Korea.

In afternoon trading in Europe, markets recovered after sharp falls of around 6 percent on Thursday. In London, the FTSE 100 was up 2 percent, helped by shares of British Airways, which were 17 percent higher after the airline raised its revenue forecast. The CAC 40 in Paris and the DAX index in Frankfurt were both 2.3 percent higher.

Other data earlier in the week painted a bleak picture, while the International Monetary Fund on Thursday forecast that developed economies would shrink next year for the first time since World War II. Central banks around the world have staged a series of rate cuts in recent months. The Bank of England announced an especially drastic cut of 1.5 percentage points, to 3 percent, on Thursday, and South Korea’s central bank, which already cut its benchmark rate by a total of 1 percent last month, on Friday shaved off another quarter of a percentage point, leaving the rate at 4 percent.

South Korea’s central bank on Friday said the “downside risk to economic growth” had increased and signaled that it might stage further cuts to ward off “the risk of a severe slowdown in economic activity brought about mainly by the financial market unrest.”

Economists polled by Reuters on Friday projected the bank would lower rates by at least another half percentage point by the middle of next year.

The South Korean Kospi stock market index rose 3.8 percent in response to Friday’s move, but the picture for the rest of the Asia-Pacific region was mixed.

In Hong Kong, the Hang Seng index rose 3.3 percent, ending the week 2 percent higher. This was despite a 20 percent slump in shares of the computer manufacturer Lenovo, following news Friday of sharply lower earnings during the second quarter and a warning that computer sales to companies were likely to remain depressed for several more quarters.

But the Nikkei 225 in Japan fell 3.5 percent, with Toyota Motor slumping 9.2 percent on the announcement Thursday that the company was halving its annual profit forecast.

The Nikkei finished the week 0.1 percent higher, mirroring the overall sense of global uncertainty about whether a bottom has finally been reached.

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