Good economic news
by Peter Switzer
The Dow finished up 50.63 points or 0.49 per cent to 10,320.10 but it was the S&P 500’s gain of 0.9 per cent to 1090.10 that’s more notable. It has beaten the 1087-level, which has been a stubborn resistance point for the market. That’s why tonight’s employment numbers will be a big test for both the market and the economy.
There was a nice run of economic news that helped the markets go higher. Retailers’ sales figures were better than expected in August and the consumer discretionary sector rose around 1.8 per cent on the New York Stock Exchange.
This is a sign that consumers are making a comeback for the back-to-school shopping phase and augurs well for the all-important holidays shopping that runs from Thanksgiving to New Year.
More good data
Another nice sign for the optimists was the fall in weekly jobless claims by 6000 to 472,000 for the week ended 28 August. This beat expectations and while small it could be the start of more improvement.
Next, the National Association of Realtors reported that pending home sales rose 5.2 per cent to 79.4 and this forward indicator contrasts positively with the negative backward readings that have helped to build the case for double dip concerns.
Finally, factory orders rose 0.1 per cent, which was the first rise in three months.
Jobs report tonight
And now for the jobs report and what are the key numbers to look for?
The expectation is that 110,000 jobs were lost in August and this would be 21,000 less than July’s disappointing result. The experts always put the spotlight on the private jobs result and the tip from economists is a 42,000 rise.
I reckon if the Yanks beat this number then we could wake up to another powerfully positive performance on Wall Street.
A very bad figure would spook the market and this week’s gains would be wiped out but we have seen economic improvement this week and that helps shore up the base, which has prevented massive sell-offs in recent times.
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Published on: Friday, September 03, 2010blog comments powered by Disqus