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The market was also lifted by encouraging comments from European Central Bank President Mario Draghi on the fiscal health of Spain. Speaking at his regular monthly news conference Draghi stated the ECB is ready to buy bonds when necessary and that the ECB will not lower its record low 0.75% refinancing rate.
Here are today's other major stories:
- Don't expect a great September jobs report- There are a few mixed labor reports to digest a day before last month's unemployment and nonfarm payroll numbers are released. Automatic Data Processing (ADP) yesterday reported the economy added 162,000 private-sector jobs in September. This was better than projections for 140,000 new jobs but much slower than last month's downwardly-revised figure of 189,000 jobs. Investors monitor ADP's numbers for clues on what the government might report, but ADP does not include public sector jobs and is not a great indicator of Friday's Labor Department's report. The Labor Department reported today that 367,000 initial jobless claims were filed last week, slightly higher than expected. The less volatile four-week moving average remained unchanged at 375,000. "The trend is still looking fairly stable. The labor market is improving but it is not really gathering direction for better or worse, it is still just plodding along," 4CAST economist Sean Incremona told Reuters. One more piece of data to look at is layoffs from outplacement firm Challenger, Gray & Christmas. It said U.S.-based employers announced plans to cut 33,816 jobs in September, down 71% from a year earlier. On average economists expect tomorrow's report to show 113,000 jobs were added in September and that unemployment ticked back up to 8.2%.
- Factory orders decline by most in 3 years- The Commerce Department reported that factory orders fell 5.2% in August after rising 2.8% in July. The decline was fueled by a 102% plunge in demand for commercial aircraft which led to a previously reported 13.2% drop in durable goods. Overall the 5.2% decline from a month earlier was expected by economists but continues the trend of a slowdown in manufacturing activity. One positive is that orders for business equipment and software, often considered a gauge of business confidence and investment plans, rose 1.1%. "These data indicate that the recent softness in manufacturing activity and capital spending is likely to continue, at least for several more months," Steven Wood, president of Insight Economics LLC in Danville, California, said in a note to clients.
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- Hewlett-Packard Co. (NSYE: HPQ) continues to slide- Yesterday HPQ stock slid almost 13% after CEO Meg Whitman lowered the company's 2013 outlook. For fiscal 2013, the company forecast overall earnings, excluding restructuring charges and other items, between $3.40 to $3.60 per share. That's well below the average forecast by Wall Street analysts of $4.18. Presenting to analysts a year after taking over as CEO, Whitman blamed the "revolving door" of executives as a main problem for the company. She said next year will be a rebuilding year. While HP won't spinoff its PC business, it will focus on fewer products and an overall leaner company. "They're not the only company having a problem with the PC market, but when you have all these other problems and in the midst of that, the PC problem isn't making your other problems look better," Ben Bajarin, an analyst at technology consulting firm Creative Strategies told Bloomberg News. HPQ stock was down another 2% today by noon.
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