Despite trading near the flat line throughout most of yesterday's session ahead of this morning employment report,
U.S. stocks seem poised to start higher today. But, of course, this can change at 8:30 a.m. when the report is released. On the off chance that the report repeats last month's performance, stocks may do a 180. A big surprise on the upside -- too strong a number -- may have a similar effect. By and large, however, the report will likely strengthen the Street's belief that the Federal Reserve may cut rates again at the end of the month and stocks will continue their recent run.
Yesterday, U.S. stocks finished with slight gains without much volatility, expectant of today's data. The Dow industrials finished up 6.26 points or 0.04%, the S&P 500 gained 3.25 points or 0.21% and the Nasdaq composite was up 4.14 points, or 0.15%.
At 8:30 a.m., then, the September jobs report is due. According to Briefing.com,
non-farm payroll is expected to increase by 100,000 after the surprise 4000 decline in August. AP reports of
expectations around 115,000 according to a Thomson/IFR survey and MarketWatch pegs it at 113,000. Economists believe that to get a real picture of the economy, this number isn't enough and investors should examine the breakdown of the job gains, specifically the
growth in private-sector payrolls. Economists are looking for job gains of about 60,000 in private sector.
The
unemployment rate is expected to tick up in September to 4.7% from 4.6% in August.
Hourly earnings is forecast to increase 0.3%, same as the month before.
Adding to this early morning stock futures gain may be
consumer confidence. Following the Fed's rate cut,
confidence in the economy revived with the RBC Cash Index rising to 80.6 from September's 71.1 reading. People feel better about the country's prospects of surviving a painful credit crunch and housing slump.
Overseas, Asian markets finished mostly higher with Hong Kong reversing yesterday's selloff. European markets were mixed ahead of data.
In corporate news:
Research In Motion Ltd. (NYSE:
RIMM) reported
second quarter results yesterday, posting double the revenue. The BlackBerry maker broke through the 10 million subscriber mark at the end of the second quarter and is expecting the growth in accounts to accelerate as the company targets the consumer market. RIM earned $287.7 million, or 50 cents per share, in the quarter ended Sept. 1, inline with analysts' expectation and up from $140.2 million, or 25 cents per share, in the same period a year earlier. Revenue more than doubled to $1.37 billion from $658.5 million.
Ford Motor Co. (NYSE: F) and Chrysler LLC
don't like the agreement General Motors Corp. (NYSE: GM) made with the UAW and are balking at the contributions required to create a union-run retiree health fund.
General Electric Co. (NYSE:
GE) said Thursday it will
close a number of lighting plants in Brazil and the U.S., including six plants in Ohio, as part of a plan to restructure its consumer and industrial division, potentially cutting more than 1,400 jobs in the process.