May 6, 2011 in Business, Nation/World

Stocks rally as job growth surprises Wall Street

Associated Press

NEW YORK — The biggest corporate hiring spree in five years is reversing a weeklong slide in the stock market.

The Labor Department reported today that private employers added 268,000 jobs, the most since February 2006. Taking into account job cuts of government workers, the economy added a total of 244,000 jobs overall last month, well above the 185,000 jobs that analysts had predicted. It was the third straight month that featured an increase of more than 200,000 jobs.

The unemployment rate rose, however, to 9.0 percent from 8.8 percent in part because the survey counted more people who resumed looking for work.

Stocks rallied broadly, lifting all 10 company types that make up the S&P 500. The Dow Jones industrial average gained 159 points, or 1.3 percent, to 12,742 in midday trading. The S&P 500 added 17, or 1.3 percent, to 1,352. The Nasdaq composite rose 43, or 1.5 percent, to 2,858.

“Everyone was a bit surprised by the jobs number,” said Frank Fantozzi, the chief executive of Planned Financial Services, a Cleveland, Ohio-based firm. “It’s a good indication for the markets that we are still in the growth stage.”

Industrials companies that benefit from global building and expansion projects led the market following the jobs report. Caterpillar Inc. rose 2.6 percent gain, the most of the 30 companies that make up the Dow average. 3M Co. rose 1.8 percent, and General Electric Co. gained 1.7 percent.

The higher jobs number also helped stem a sell-off in commodities brought on by fears that the economy was sputtering. Regular investors and speculators had begun to flee commodities in an effort to lock in profits in case the economy slowed even further. Oil rose back above $100 a barrel after falling below the mark Thursday for the first time since mid-March.

“The jobs report put an end to the idea that growth appeared to be weakening, which is what really fueled most of the declines in commodities this week,” said Jeffery Kleintop, the chief strategist at LPL Financial.

Financial markets are markedly different than this time last year. Friday marks the one-year anniversary of the “Flash Crash.” Stocks tumbled that day when one large trade overwhelmed the market’s computer servers and sent prices in a tailspin. Though stock prices made up most of their lows, the sudden drop fueled skepticism that stocks were a safe investment. That led many investors to pull money out of the stock market.

Berkshire Hathaway Inc. and Fannie Mae are among the companies reporting quarterly results by the end of the day.

31 comments on this story so far. Add yours!

DickAdams on May 06 at 9:51 a.m.
Really? I wonder if the numbers are inflated. The MSM is famous for irresponsible reporting. And they wonder why their poor reporting is causing there demise.
Dazzeetrader11 on May 06 at 9:52 a.m.
9% unemployment (back up).
Gas taking 9% of average household budget. 6% is the tipping point for zero growth.
Application for unemployment benefits up yo 471,000 for the month. Highest since 2003.
Devalued dollar (now 75cents compared to 5 years ago). Taxes on the rise to fund Obamacare and make up for the stimulus losses, $3.4 trillion sent overseas from the Fed….and quite a few other things.
Things aren’t well. We could use a change.
Dazzeetrader11 on May 06 at 10:03 a.m.
24% of those 241K new jobs were at McDonalds! Nice! Boy what a fine victory this is!! But it does indicated American WILL work if there are any jobs.
http://www.bloomberg.com/news/2011-04-28/mcdonald-s-hires-62-000-during-national-event-24-more-than-planned.html
notaSmartBombsFan on May 06 at 11:26 a.m.
UNEMPLOYMENT BACK UP TO 9.0% That should be the headline here. But Crooks & his cronies on the left won’t let that be in the headline.
notaSmartBombsFan on May 06 at 11:32 a.m.
What a stock market rally… its up 0.38%.
Dazzeetrader11 on May 06 at 11:39 a.m.
GDP predicted 7% but now independent sources say 1.8%.
It’s not going well this dabbling in socialism.
hawken on May 06 at 12:12 p.m.
It’s just more smoke and mirrors.
U6 Unemployment is 15.9%
U6 Unemployment last month was 15.7%
http://www.bls.gov/news.release/empsit.t15.htm
It’s like your doctor telling that you your cold is getting better when he knows that you really have a serious case of pneumonia.
johnclarke on May 06 at 12:15 p.m.
Obviously, any job growth is due to Reaganomics finally paying off.
McDonalds hiring =24% of job growth
GOP jobs bills=0
As usual, the GOP is still focused on important stuff like telling women what to do with their girl parts. Meanwhile, the economy is recovering, Wall Street is fat and happy again - and the Republicans have no candidate. I see no reason to waste money on an election in 2012. In spite of the GOP’s best efforts, things are getting better.
Loudin on May 06 at 12:28 p.m.
Oh you silly people…more of the “conspiracy” talk, this time about inflating numbers. No wonder you guys don’t post that stuff under your real names.
BTW: This country has been Socialist for decades. Social Security & Medicare are “transfers of wealth” from one group (workers) to other groups (retirees, invalids, children); if you hate Socialist so much, quit taking money from hard-working people. And before you cry about having paid into the program, remember that you made a deal w/the government…not me or any other American who is gainfully employed. As far as I’m concerned, if you are whining about Socialism and then living off the teat of Social Security (and my wages), you are an ignorant hypocrite.
Personally, I’m tired of this “transfer of wealth” from productive people to layabouts; “transfer of wealth” is the hallmark of Socialism. Just because you didn’t plan well enough to provide for your future and left it all in the hands of a national Ponzi-scheme doesn’t mean I ought to foot the bill. But I understand people don’t plan well; it’s just that I think the most loud-mouthed “anti-Socialist” types ought to show some backbone and quit living off the government when they retire. Any of you rightwingers have any integrity? Or is it still the “do as I say, not as I do” thing?
The United States of America: A Socialist-hybrid nation since 1935. Deal with it, whiners…
Loudin
Dazzeetrader11 on May 06 at 12:38 p.m.
Loudin…that’s the point. The Pubs are trying to “deal with it” as you say. Trouble is that the Obama/Dem socialists hide behind the programs and expand them.
US won’t be fiscally sound again ever untill the “gimmees” are taken out of the equation. Recuing spending is harsh is you think you’re somehow entitled to free lunches.
Cut medicare in half and rid the government influence. Vouchers are much cheaper and give better choices o the oldsters. Have the SS types pay in more. Keep the Military stron.
Rid the US of the unions. Stop the wars. Things get better.
None of which will be done by Obama or he’d get the new job most wish he’d get. The public has had enough. Novemeber showed it. 2012 will disembowel the Liberal Senate…and then all this nonsense will be trimmed.
Obama’s idea of stealing from the wealthy won’t work. It might get him re-elected but it won’t work any more than what he’s doing now. Gives a nice speech though…
hawken on May 06 at 12:41 p.m.
As I said on another string, liberals need to be reminded daily that they control the Senate and Presidency.
Their “stinky” old Red Herring, that the GOP isn’t getting things done, needs to be thrown in the dumpster.
Let me repeat, liberals control the Senate and the Presidency.
johnclarke on May 06 at 12:59 p.m.
Well, I was wrong - the GOP has their candidates. We have Hawken, the 17 year old community college student and Daisy, the library dwelling VP. I like their chances versus say Trump and Palin, who are also both equally nuts.
And PS Hawken junior, sit and watch Schoolhouse Rock some time and see where bills come from. That would be the very same place all those wacky bills are coming from these days (hint: it’s controlled by the GOP)
jddavis on May 06 at 1:32 p.m.
Loudin—RIGHT ON!
Loudin on May 06 at 2:08 p.m.
Jd,
It’s the spirit of the thing that really bothers me. That is, the typical conservative guy that is totally up in arms about Socialism/Liberalism and yet is sitting on his couch, watching FAUX and collecting a government pension. The hucksters of cable news and AM hate radio have convinced him that Social Security & Medicare aren’t Socialist programs, but “earned” rights of passage for being an old fart. It’s crazy…but then crazy people rationalize all sorts of kooky things when it’s to their benefit.
O/T: There’s this guy that picks his daughter up at my kid’s school. He drives this old full-size Chevy truck w/the words “Obama, Pelosi, Reid Can Kiss My Red, White & Blue Ass!” on it. For somebody to rationalize the problems of this country into a simplistic “us vs. them” mentality is ridiculous; but to put it in letters on your piece of junk truck is simply ignorant. I’d love to have access to the his life story…to know his education, his life experiences, his successes and failures…I bet it would be a great indicator of where his kid is going to end up (and it most likely won’t be very good). To be honest, I’m a little worried that an unstable guy like that (a guy that puts his opinions in vinyl lettering on his car) might make some bad decisions if he met a bump in the road (layoff, wife leaves him, Obama re-election). I tend to look for his presence when I’m there…just in case he’s gone completely off his rocker. Unfortunately, there are a lot of conservative guys like that in this area…goes hand-in-hand w/having a relatively minimally educated populace. I know it’s a bane to the Right, but it’s true: The more educated you are, the more likely you are to vote Democrat. That’s why the locals who hate unions and teachers are mostly high school educated types…just ask Dwayne Alton and his Anti-Levy Cabal.
johnclarke on May 06 at 2:21 p.m.
Loudin and JD - when oh when will they learn that “conservative” thinking and economics simply does not work as shown clearly in simple statistics available right here on this very internet.
The really ironic thing is there is like a small handful of rich folk, and the rest of the right wing nuts will never benefit one dime, and they simply don’t know better. As long as those Nascar races are on TV, they are happy.
Dazzeetrader11 on May 06 at 3:28 p.m.
Clarkie..keep thinking like that. You’re sounding like you’re not tough enough to tighten your retirement belt. Everyone will have to. It’s beyond credibility that the liberals ( and you ARE one Clarkie…don’t pretend to be an Inde conservative because you don’t qualify) don’t quite have the courage to understand this.
It’s either that or turn to the government and hope for the best …Obama’s plan (socialism codified). Take from the success stories and plug it in to the jealous ones who whine about the success stories.
Figures…
http://dailycaller.com/2011/05/06/thomas-sowell-debunks-taxing-the-rich-and-government-intervention-in-housing-energy/
Something for you to think about: The stock market will not save you. You’re not in it substantially anyway. <sticking tongue=”“ out=”“>…D
ManleyPointer on May 06 at 3:35 p.m.
Loudin, please keep in mind that we have paid a significant percentage of our incomes into the social security “trust fund” throughout our working lives, so it isn’t unreasonable that we should expect to get that money back, maybe even with interest, at some point. When you’ve had a job for any length of time, you’ll get a printout mailed to you by the SSA with figures reflecting the amount of YOUR money you’ve paid into this system. When you see it in black and white like that, it will become a little more real to you, and you might understand why those of us who otherwise decry what we see as “socialism” might feel differently about social security.
ManleyPointer on May 06 at 3:49 p.m.
And do you REALLY pretend that all the lunacy and reactionary thinking is on the RIGHT?? Wow.
johnclarke on May 06 at 3:50 p.m.
I don’t “pretend” to be anything Daisy. I’m an Independent, and the moment you find me a conservative running for office, I’ll vote for them. The conservatives of the last 50 years spend like drunken sailors. (no offense Navy, don’t be sending a Seal team my way)
Again, any time you want to pony up some evidence (of conservative thinking ever working ) I will be happy to read it. Otherwise, stay safe my little flower.
crazyivan44 on May 06 at 3:59 p.m.
Wow Loudin, you describe pretty much the exact OPPOSITE of what I am, but I am happy that you are satisfied with your stereotype of conservatives and feel that you are in a superior position to decide for us what is best because we are obviously too stupid to all come to the table together and figure it out.
ManlyPointer you have a very valid point. Just like when people have to go on unemployment for a few months, they are paying into the system their whole career.
Unfortunately one generation, hopefully this generation, is going to have to take the hit and absorb the brunt of the shift so we can get things kicked off right and cut loose from our entitlements. It is not right to strip people nearing retirement of the benefits they were promised, and younger generations have a lifetime to prepare for a retirement without those entitlements, or at least less entitlements than we have now.
The article touches briefly on folks that were previously not looking for work being back in the market looking for jobs…I personally suspect that will be a huge wildcard over the next 3-5 years and cause much fluctuation. I think our GDP and other markers in addition to unemployment is a much more accurate depiction of economic health and job growth potential.
johnclarke on May 06 at 5:32 p.m.
“we are obviously too stupid to all come to the table together and figure it out.”
Well Ivan, 40% of the people on Social Security must be stupid, since SS keeps them out out poverty. Unfortunately, conservatives are obsessed with ruining SS, which is sort of odd since it works so well. Sure, it’s going to require adjustments as time goes by. Please tell me, what is the conservative alternative to keep those people out of poverty.
Just imagine that big fat funding source turned over to the same crooks that nearly sank our economy. This is supposedly what Bush saw as his greatest failure, (not privatizing social security) and in fact I see that as one of his few success stories. That’s right, by doing nothing he actually did something right.
Dazzeetrader11 on May 06 at 5:40 p.m.
Wonderful post Crazyivan! It’s a very good summary.
SOunds like us conservatives have a recent and veyr good person with us.
GDP with this economy is very very low. We need to fix that. Everything flows from housing and jobs. You might be surprsed how much comes from construction, use of materials, jobs, gas, travel…nearly everything.
I hope Obama solves things. He won’t but there’s always hope.real hope…not “hopey changey” used to get the population to dream of a terrific world. It’ll take a while.
I hope reality sets in. Obama;s his people offer dream, conservatives offer work.
johnclarke on May 06 at 5:53 p.m.
and no proof of any conservative ideals ever working. Unless you actually have some and you have been hiding it from the world.
misjustice on May 06 at 7:19 p.m.
Well, the regressives are already pulling back from Eddie Munster’s plan to change Medicare into a voucher system; they can see the handwriting on the wall, and it says LOSERS in 2012!
; )
And the growth in hiring was done without Mr. Boner or his shadow, McMorris Rodgers and her stepford wives smile, fulfilling their campain promises to focus on job creation. Hmmmm.
; )
Arizonian on May 06 at 7:48 p.m.
I like that misjustice. So true! Boner and his shadow McMorris Rogers. Maybe they’re having an affair?
Dazzeetrader11 on May 06 at 8:15 p.m.
We’ll see about the “loser” label…you know the one Obama should have;)
misjustice on May 06 at 8:17 p.m.
But doesn’t; much to Dazzee’s chagrin!
; )
Oh, and he doesn’t need a cod piece to pad his man part area, either; if you know what I mean! Wink, wink, wink!
; )
crazyivan44 on May 06 at 9:08 p.m.
Hi John!
By “we” being stupid I was referring to us good down to earth work 5 days a week have a modest lifestyle salt of the earth conservatives, not the stupid politicians that call themselves that but spend money like royalty and give us a bad name =)
I certainly don’t have some big grand plan laid out ready to roll, but I will tell you what I do know…I’ve been able to consistently and steadily grow my own portfolio despite all of the economic issues in the past 5 years that I have been managing it without a horrible amount of time spent researching and crunching numbers…so while I absolutely have reservations over turning SS over to someone that is in bed with the government, I do believe that there is some way that we can set up something for people to have some choices in how their money is utilized and grown.
I don’t know the exact specifics of how this works, but I know that some public service unions in WA (and also in the works in ID) for emergency services personnel are somehow opting out of SS and instead that money gets redirected in a sort of privatized retirement fund that the union guys get to vote on and have a say in how that money is allocated for various investments. From what I have heard about it they can seek out their own fund manager and aren’t beholden to the government to dictate all this for them (I am sure there are plenty of regulations they have to follow, but they have significant leeway in the decision making process). Time will tell how it works out. If something like that proves successful I would like to see that option get rolled out to you and me if we so choose to take part in it.
Now as I understand it, they are not simply stopping SS and only paying into their pension fund, this is in addition to that public employee pension fund, so in theory it could be viable for those of us that do not have pension funds and would be a conservative investment fund in addition to whatever 401k or IRA money we have in lieu of our SS payments. I will try to do some research on this and get some resources together to share. Yes, I do see the problems with that and people making poor investment choices, etc. Maybe there can be a “default pool” that people that don’t care to invest time and effort into this program could be automatically put into, I don’t know, haven’t thought that far ahead on that end of it yet.
There’s infinite directions to run with it, this is just one brainstorming idea. Bottom line, I don’t think any solution is going to be completely fair to everyone, and some people may get downright screwed, but people are getting screwed right now as it is. My larger concern is ultimately what is going to be sustainable for the country. I don’t think it is as simple as math, I think we need a complete culture shift away from materialism and instant gratification in order to pull this off. How is that for a pipe dream!
eagleproducer on May 06 at 10:09 p.m.
Scoreboard!
eagleproducer on May 06 at 10:11 p.m.
I wonder if KKKarl Rove knows how to pronounce “permanent minority?”
crazyivan44 on May 06 at 10:23 p.m.
Dazzee,
Thank you. I agree to a large extent with your comment on construction. I’ve read several reports recently on China that suggests that a major reason their economy is growing so rapidly is because of rapid building and expansion, whether they need it or not (build it and they will come). It will be interesting to see if/when that catches up to them.
There are so many things that we need to build domestically, such as electrical infrastructure to make a more secure and efficient power grid, that I believe would truly jumpstart our economy and help us to gain momentum. I don’t like using the stock market performance as a key measure for the economy as many will suggest because it is so open to manipulation. But then again I am a healthy cynic =)