BLBG: U.S. Stock Futures Rally on Bigger-Than-Forecast Jobs Growth
By Michael P. Regan
May 7 (Bloomberg) -- U.S. stock-index futures rallied after the government said the nation added 290,000 jobs last month, bolstering optimism that the economic rebound is strengthening. Treasuries retreated.
Futures on the Standard & Poor’s 500 Index expiring next month jumped 1 percent to 1,133.6 at 8:32 a.m. in New York. Dow Jones Industrial Average futures climbed 79 points, or 0.8 percent, to 10,536.
U.S. stocks tumbled yesterday on concern contagion from Greece’s fiscal crisis will halt the global recovery. The selloff briefly erased more than $1 trillion in market value as waves of computerized trading exacerbated declines.
The Dow average yesterday sank almost 1,000 points, a 9.2 percent plunge that was its biggest intraday loss since 1987 and biggest point drop ever, before closing down 347.8 points. The S&P 500 has declined 7.3 percent from this year’s high on April 23 amid concern that European government debt levels will derail the global recovery.
U.S. regulators plan to examine whether securities professionals triggered yesterday’s stock-market plunge or exploited the turmoil to profit illegally, two people with direct knowledge of the matter said.
The Securities and Exchange Commission aims to determine if market participants accidentally or maliciously entered orders that derailed normal trading, the people said, declining to be identified because the inquiry isn’t public. The agency will also examine if controls to prevent the rout from snowballing weren’t in place at exchanges and firms.
Broken Trades
Nasdaq OMX Group Inc. said it will cancel trades of 286 securities that fell or rose more than 60 percent from their prices at 2:40 p.m. New York time yesterday, just before U.S. equities plummeted.
The biggest U.S. fund managers say the bull market in stocks should weather Europe’s widening sovereign debt crisis even as it spurs the largest surge in volatility since the collapse of Lehman Brothers Holdings Inc.
While equities may post more losses as countries from Greece to Spain struggle to cut deficits, managers at Birinyi Associates Inc. and First Citizens BancShares Inc. say declines are a buying opportunity. The biggest one-day retreat since April 2009 has made American stocks more attractive by reducing valuations as the economy and corporate profits recover, said Thomas Lee, chief U.S. equity strategist at JPMorgan Chase & Co.
