BLBG: U.S. Stocks Advance as Report Shows Employment Growth
U.S. stocks rose, with the Standard & Poor’s 500 Index heading for its biggest weekly rally in 13 months, after government data showed employers added workers in December at about the same pace as the prior month.
The S&P 500 added 0.1 percent to 1,460.68 at 9:32 a.m. in New York.
“It’s a marginally positive report,” Joseph Tanious, a New York-based global market strategist for JPMorgan Funds, which oversees $400 billion, said by telephone. “It reinforces the view that the labor market is healing but at a very slow pace. The private sector payrolls number was a step in the right direction.”
Payrolls rose by 155,000 workers last month following a revised 161,000 advance in November that was more than initially estimated, Labor Department figures showed today in Washington. The median estimate of 82 economists surveyed by Bloomberg called for a increase of 152,000. The unemployment rate held at 7.8 percent, matching the lowest since December 2008.
A separate release from the Institute for Supply Management at 10 a.m. will show its services index, which covers almost 90 percent of the economy, eased to 54 in December from 54.7 in November, according to the median estimate. A reading above 50 means that activity increased.
Fiscal Cliff
The S&P 500 has risen 4.1 percent this week, its largest advance since December 2011, and yesterday climbed within one point of its highest closing level in five years before retreating. The gauge soared 2.5 percent on Jan. 2 after Republicans and Democrats agreed on a compromise budget that avoided the so-called fiscal cliff of sweeping tax increases and spending cuts.
The equity benchmark surged 13 percent in 2012, its biggest annual rally in three years, as the Federal Reserve expanded asset purchases and the European Central Bank announced an unlimited bond-buying plan. Stocks slipped yesterday after Fed policy makers said they will probably end their $85 billion monthly bond-purchase program sometime in 2013.
RBC Dominion Securities Inc. raised its stance on U.S. equities in a report today, recommending that investors hold more of the securities than are represented in benchmarks.
“Regardless of what one might think about Washington’s last-minute fiscal deal, it seems to have removed a layer of uncertainty and this is positive for share prices,” analysts led by Myles Zyblock wrote in the note.
To contact the reporters on this story: Sofia Horta e Costa in London at shortaecosta@bloomberg.net; Inyoung Hwang in New York at ihwang7@bloomberg.net
To contact the editors responsible for this story: Andrew Rummer at arummer@bloomberg.net; Lynn Thomasson at lthomasson@bloomberg.net
