U.S. stocks rallied Friday, as investors cheered a much stronger-than-expected jobs report.
The Dow Jones industrial average () gained 157 points, or 1.2%, the S&P 500 () added 19 points, or 1.5%, and the Nasdaq composite () increased 46 points, or 1.6%.
The rally pushed pushed the Dow, up more than 5% in 2012, to its highest level since May 2008. The Nasdaq, up more than 11% for the year, climbed to its highest level since December 2000. The S&P 500 has gained almost 7% this year, and finished at a six-month high.
The rally was sparked by the Labor Department’s monthly jobs report, which showed that the U.S. economy added 243,000 jobs in January, far exceeding expectations. The unemployment rate dropped to 8.3%, the lowest since February 2009.
Economists surveyed by CNNMoney had expected the government to report an increase of just 130,000 jobs in January. The unemployment rate was expected to rise to 8.6%.
Check the unemployment rate in your state
Economists had expected a slowdown in post-holiday hiring, considering that about 40,000 temporary couriers were hired for the holidays alone..
"The jobs data blew away market expectations," noted Marc Chandler, global head of currency strategy at Brown Brothers Harriman, calling it a "monster" jobs report. "This coupled with other recent reports for January, show the year has begun off on a firm note," he added.
Meanwhile, investors were also on the lookout for an official agreement on a debt-reduction plan and a second bailout for Greece. The deal is expected to be near, but negotiations are likely to continue thorough the weekend.
U.S. stocks ended mixed Thursday as investors digested a cautious economic outlook from the chairman of the Federal Reserve.
Economy: Factory orders for December rose 1.1%, slightly below expectations. The January installment of the ISM Services Index hit 56.8, surpassing economists’ expectations for 53.1, and up sharply from the prior month.
Companies: Financial stocks were big gainers in Friday’s rally, with Bank of America’s (, Fortune 500) 5% spike leading the Dow’s gains. Morgan Stanley (, Fortune 500), Citigroup (, Fortune 500) and Goldman Sachs (, Fortune 500) were all up between 3% and 5%.
Shares of Genworth Financial (, Fortune 500) soared 14% after the mortgage insurer swung to a fourth-quarter profit.
Tyson Foods (, Fortune 500) shares rose after the company reported better-than-expected earnings and issued slightly upbeat guidance.
Estee Lauder (, Fortune 500) reported a 15% profit increase for its fiscal second quarter to $597 million, but its stock tumbled as the company’s guidance for the current quarter came in short of analyst expectations.
Shares of Gilead Sciences (, Fortune 500) spiked after the company posted fourth-quarter earnings that rose almost 6% from a year ago.
Edwards Lifesciences’ () stock dropped as earnings fell and the company gave a lackluster forecast for the current quarter.
Zynga () shares continue to rise, after Facebook’s IPO revealed the gamemaker accounted for 12% of its revenue in 2011.
Facebook IPO shrinks private trading market
Research in Motion () shares dipped after the BlackBerry-maker said it will give its tablet, the BlackBerry PlayBook, out to Android developers in exchange for their apps.
Trading in shares of Micron Technology (, Fortune 500) was halted after the company announced that its CEO and chairman Steve Appleton died Friday morning in a small-plane crash in Boise.
Currencies and commodities: The dollar slipped against the euro and the British pound, but rose versus the Japanese yen.
Oil for March delivery rose $1.48 to settle at $97.84 a barrel.
Gold futures for April delivery fell $19 to settle at $1,736.80 an ounce.
Bonds: The price on the benchmark 10-year U.S. Treasury fell, pushing the yield up to 1.95% from 1.82% late Thursday.
World markets: European stocks ended sharply higher. Britain’s FTSE 100 () rose 1.8%, while the DAX () in Germany jumped 1.7% and France’s CAC 40 () rose 1.5%.
Asian markets ended mixed. The Shanghai Composite () rose 0.8%, while the Hang Seng () in Hong Kong was flat and Japan’s Nikkei () slipped 0.5%.
Looking for health insurance? Find a variety of affordable medical insurance plans.
Leading finance chiefs sought to reassure anxious global business leaders on Friday that Europe is on track to solve its crippling debt crisis before it drags the world’s economies down. Europe’s top banker said investors, burned after trusting the region’s governments too much, now trust them too little.
The finance chiefs said the picture in Europe has changed over the past two months as the European Central Bank has loaned billions of euros to fragile banks, indebted countries have pushed through convincing reforms and EU leaders have come near to building a closer fiscal union that would make their common currency stronger.
Several also signaled Friday that Greece is close to clinching a crucial debt-reduction deal with private bondholders _ a key element in Europe’s efforts to stem a two-year debt crisis that is causing ripples around the globe. The crisis is a central topic at the World Economic Forum, a gathering of government and business leaders at the Swiss ski resort of Davos.
“They’re making progress on reforms, they’re changing the institutions of Europe to put better discipline on fiscal policy,” said U.S. Treasury Secretary Timothy Geithner. “You have three new governments doing some very tough things. You have an ECB doing what central banks have to do. You see them move to try to strengthen the financial sector.”
Mario Draghi, head of the European Central Bank, said a combination of actions _ including super-cheap, long-term loans to shaky banks on the continent and a couple of interest rate cuts _ have helped Europe avoid deeper financial trouble.
“We have avoided a major credit crunch, a major lending crisis,” he said.
Draghi said borrowing rates would remain high “for quite a while” because bond markets are overestimating the risk involved in holding European government debt after years of underestimating it. But he called market pressure “the most potent engine for reform in different governments.”
Geithner said the fate of the U.S. economy _ and by extension of the rest of the world _ hinges on Europe’s debt crisis, along with potential tensions with Iran. He said the main piece of unfinished business for Europe is building a bigger fund to help troubled economies survive.
But while French Finance Minister Francois Baroin said that fund needs to be increased to calm markets, his German counterpart, Wolfgang Schaeuble, indicated that his government is not prepared to do so. Germany, as Europe’s biggest economy, would face the biggest bill.
“We must not give the wrong incentives,” Schaeuble said. “You can make any figure. It will not work if the real problems will not be solved.”
Both, together with Spanish Economy Minister Luis de Guindos Jurado and European Monetary Affairs Commissioner Olli Rehn, agreed that the idea of issuing “eurobonds” backed jointly by all eurozone governments is a nonstarter for now. They didn’t rule out the possibility that such bonds could be introduced once confidence in Europe’s public finances is restored, with Guindos calling that a “final target.”
Schaeuble said eurobonds would provide bad incentives by allowing debt-ridden countries to “spend money you don’t have on the bill of others.”
Many economists have said eurobonds are needed to solve the crisis as they could reduce the borrowing costs of heavily indebted countries by pooling them with bonds of stronger economies like Germany’s.
Professor Nouriel Roubini, the renowned economist who predicted the financial crash of 2008, is one who thinks that eurobonds have to form part of a eurozone strategy to fend off the possibility of a breakup.
The eurozone “could be a slow-motion train wreck,” Roubini said.
Europe has been grappling with the crisis ever since Greece conceded at the end of 2009 that its public finances were in far worse shape than previously thought. Greece remains at the epicenter of the crisis over two years later. Its borrowing costs remain too high for it to borrow in the markets so a second European-led bailout is in the offing.
The finance chiefs signaled Friday that a deal is at hand that could help ease some of the near-term tensions.
Greece has been negotiating with the a group representing banks and other lenders in the hopes that they will forgive half of Greece’s debt in exchange for Greek assurances that it will pay back the other half without defaulting on its loans. The deal would also let Greece repay over a longer period at a lower interest rate _ negotiators have been trying to agree on what that rate will be.
Schaeuble said he is “quite optimistic” about a deal, while Rehn said he hopes a deal can be reached “if not today, maybe by the weekend.”
Agreement between Greece and its creditors is needed before Europe and the International Monetary Fund agree to a second multibillion-euro bailout package.
At the heart of the problem is that the 17 countries that use the euro use a single currency but have different fiscal policies. That changes the nature of their debt, said Adair Turner, chairman of Britain’s banking regulator the Financial Services Authority.
“That debt is more equivalent to the State of California debt than the U.S. federal debt,” he said.
That’s why all but one of the 27 EU countries _ the United Kingdom has refused to participate _ are discussing a closer fiscal union. On Monday, leaders meet in Brussels to work out the details of that new compact.
Schaeuble and Baroin noted that even the agreement in principle to forge closer ties has calmed markets since a December summit, as borrowing rates have dropped and stock markets have risen.
“It’s amazing,” Draghi said. “If you compare today with even five months ago, the euro area is another world.”
The crisis threatens more than Europe: the U.N.’s refugee chief warned Friday that it is fueling conflicts around the world. Antonio Guterres told The Associated Press that rising food prices and growing unemployment are hitting those already at the bottom hardest, sparking conflict in places like South Sudan and exacerbating hotspots including Afghanistan, Iraq and Somalia.
_____
Frank Jordans and Edith Lederer in Davos and David McHugh in Frankfurt, Germany contributed to this story.
Get up to $1500 with an fast cash loans in less than 1 hour - 100% online.
The average U.S. price of a gallon of gasoline has jumped three-and-a-half cents over the past two weeks.
That’s according to the Lundberg Survey of fuel prices, released Sunday, which puts the price of a gallon of regular at $3.39.
Midgrade costs an average of $3.54 a gallon, and premium is at $3.66.
Diesel was up about two cents, at $3.91 a gallon.
Of the cities surveyed, Salt Lake City, Utah, has the nation’s lowest average price for gas at $2.94. Los Angeles has the highest at $3.71.
In California, the lowest average price was $3.59 in Fresno. The average statewide for a gallon of regular was $3.67, up about three cents.
Apple Inc. hopes to revolutionize the education industry
Jim O
Google searches just got more personal.
The Internet search giant is now sorting through photos and posts from its social network Google+ in its quest to provide the best search results
President Obama gave a pep talk Friday to the staff of the Consumer Financial Protection Bureau — including the new director he controversially appointed this week.
"Every one of you here has a critical role to play in making sure that everybody’s playing by the same rules — to make sure the big banks on Wall Street play by the same rules as community banks on Main Street," Obama said.
The bureau is likely to face a bumpy road after the president’s recess appointment of Richard Cordray, a former Ohio attorney general, as the bureau’s first official director.
Obama’s move angered Republicans in Congress who had tried for months to prevent the president from making exactly that appointment unless he agreed to structural changes in the consumer bureau. They say the bureau — which came into existence last year as part of the Dodd-Frank financial reforms — is unaccountable and they deny the legitimacy of the appointment, saying Congress isn’t in recess.
The administration counters that the pro-forma sessions aimed at blocking the recess appointments aren’t legitimate, and that the president has a Constitutional obligation to appoint people to keep government running.
A House Republican panel has called Cordray to testify later this month. And business groups are talking about a legal challenge to the bureau’s authority.
The Consumer Financial Protection Bureau is an independent agency created as part of the Wall Street reforms of 2010 tasked with regulating financial products such as mortgages and credit cards bad credit payday loans.
As its new chief, Cordray has said he plans to move forward and not worry about potential lawsuits that may challenge his agency’s powers.
In his address on Friday, Obama praised the bureau for moving forward to target nonbank firms that issue financial products such as payday lenders, debt collectors and mortgage servicers — sectors that remained unregulated while the bureau lacked an official director.
"Now that Richard is your director, you can finally exercise the full powers that this agency has been given under the law," Obama said. "No longer are consumers left alone to face the risk of unfair or deceptive or abusive practices. Not any more."
Obama gave a "special shoutout" to Elizabeth Warren, the Harvard University professor who came up with the idea of the bureau. The White House bypassed Warren, a critic of the banking industry and lightning rod to Republicans, in favor of nominating Cordray to run the bureau. Warren is now running for the U.S. Senate.
The mention of Warren’s name drew big cheers from the crowd of 100 employees attending the speech at the main offices of the bureau, which now has a staff of around 800.
European confidence in the economic outlook fell to the lowest in more than two years and German factory orders plunged as the euro area
Investors threw cold water on the New Year’s rally, with U.S. stocks set for a modest pullback at Wednesday’s open.
Dow Jones industrial average () and S&P 500 () futures were down 0.3%, while Nasdaq () futures were flat. Stock futures indicate the possible direction of the markets when they open at 9:30 a.m. ET.
Jitters surrounding Europe’s debt crisis have resurfaced, leaving investors on edge. Uncertainty about Greece, along with reports that Spain might seek rescue funding, weighed on sentiment.
A spokeswoman for the Spanish government told CNN the reports were "a complete lie" and "radically false," and separately Greek officials said Tuesday that progress had been made.
"We’re still watching Europe simmering now. We have another summit coming up and the problems are all still there," said Scott Brown, chief economist for Raymond James.
Europe: Still a huge pain for investors
European Union leaders hold their first summit of 2012 on Jan. 30. Political leaders hashed out a fiscal agreement in early December, but investors remain skeptical about how effective it will be.
Stocks rallied Tuesday following strong manufacturing reports from China, India and the United States.
Bank stocks — one of last year’s worst-performing sectors — led the Dow higher in the prior session. Bank of America (, Fortune 500), Citigroup (, Fortune 500) and JPMorgan (, Fortune 500) all posted strong gains.
World markets: European stocks fell in midday trading. Britain’s FTSE 100 () lost 0.1%, while the DAX () in Germany shed 0.8% and France’s CAC 40 () slid 0.7%.
Asian markets finished mixed. The Nikkei () gained 1.2%, while the Shanghai Composite () fell 1.4% and the Hang Seng () lost 0.8%.
Economy: The Census Bureau will release data on factory orders for the month of November before the opening bell business cards. Analysts surveyed by Briefing.com expect orders to have risen 2.1% in November, after dropping by 0.4% in October.
In the afternoon, the Commerce Department will release data on auto and truck sales for December. Auto sales stood at a 4.36 million annual rate in November, while truck sales were at a 5.98 million rate.
Companies: Before the opening bell, Yahoo (, Fortune 500) shares dropped 1.6% on reports that the search engine will name eBay’s (, Fortune 500) PayPal President Scott Thompson as its new CEO. Shares of eBay fell 1.1%.
Caterpillar (, Fortune 500) shares fell 1% in premarket trading, after the construction equipment manufacturer announced it will expand its research and development center in Wuxi, China.
Dunkin’ Brands () shares climbed 1.5% ahead of the bell, after the company announced it plans to double the number of its Dunkin’ Donuts restaurants in the United States in the next 20 years. The chain currently operates about 7,000 restaurants nationwide.
Cabot Oil & Gas () announced a two-for-one stock split, after its stock rallied 105% over the last year. The company also plans to increase its quarterly dividend 33%. Shares rose 3.3% in early trading.
Currencies and commodities: The dollar rose against the euro and British pound, but fell versus the Japanese yen.
Oil for February delivery slipped 70 cents to $102.26 a barrel.
Gold futures for February delivery fell $2.60 to $1,597.90 an ounce.
Bonds: The price on the benchmark 10-year U.S. Treasury fell, pushing the yield up to 1.96%.
The U.S. Treasury again shied away from labeling China a currency manipulator on Tuesday, but it rapped the country for not moving quickly enough on exchange rate reforms.
The United States also chided Japan for stepping into the currency market to stem the yen’s rise, and urged South Korea to use such interventions sparingly.
Some U.S. politicians have argued that China has gained an unfair competitive edge in global markets by keeping the yuan artificially low to boost exports, and pressure has mounted in Congress for President Barack Obama to punish China.
But the administration prefers to tread softly and use diplomacy. The U.S. Treasury, in a semi-annual report, as usual said that statutes covering a designation of currency manipulator “have not been met with respect to China.”
It repeated its standard line that appreciation in the yuan has been too slow, calling it “insufficient.”
“Treasury will closely monitor the pace of appreciation and press for policy changes that yield greater exchange rate flexibility, a level playing field, and a sustained shift to domestic demand-led growth,” it said in the report to Congress on international economic and exchange rate policies.
The value of the yuan, which Beijing manages closely, has risen 4 percent against the dollar this year and 7.7 percent since China dropped a firm peg against the greenback in June 2010. The Peterson Institute for International Economics recently estimated the yuan was undervalued by 24 percent against the dollar, down from 28 percent earlier in the year. It attributed the change to both Beijing’s policy of gradual currency appreciation and higher Chinese inflation.
At the heart of the friction between the two countries is a U.S. trade deficit with China that swelled in 2010 to a record $273.1 billion from about $226.9 billion in 2009. The cumulative Jan-Oct deficit with China is on track to top that this year, running at around $245.5 billion.
The U.S. Senate this year for the first time passed a bill that would require the administration to slap penalties on Chinese imports if it fails to adopt market-based exchange rates. While the measure has made no progress in the lower chamber and is unlikely to become law, it shows the mounting U.S. frustration with its vital trade partner.
President Obama at the November APEC meetings, in his toughest words yet, told President Hu Jintao that China must play by global trade rules and act like “a grown-up.”
Beijing has warned the United States not to “politicize” the currency issue, and some economists have pointed out that nations such as Japan and Switzerland have intervened in currency markets without drawing Washington’s ire.
TARGETING TOKYO
The report did point the finger at Japan this time, criticizing Tokyo for its solo yen-selling interventions in August and October that followed a joint Group of 7 action in the aftermath of the March 11 earthquake.
“The unilateral Japanese interventions were undertaken when exchange market conditions appeared to be operating in an orderly manner and volatility in the yen-dollar exchange rate was lower than, for example, the euro-dollar market,” the report said.
“In contrast to the post-earthquake joint G7 intervention in March, the United States did not support these interventions,” the Treasury said, adding that Tokyo should pursue reforms to revive its domestic economy rather than try to influence the exchange rate.
A senior Japanese government official said the report did not change Tokyo’s position that its currency policy was in line with G7 agreements.
“This report does not make it more difficult for Japan to intervene,” said the official, who spoke on condition of anonymity due to the sensitivity of the topic. “We are committed to doing whatever is necessary.”
Japanese exporters have complained that the ultra-strong yen puts them at a competitive disadvantage. The yen was trading at just under 78 to the U.S. dollar on Wednesday morning, about 3 percent weaker than it was on October 31, when Tokyo aggressively intervened to cap the rise.
The report also noted that South Korean authorities “should limit their FX interventions to exceptional circumstances of disorderly market conditions and adopt a greater degree of exchange rate flexibility.”
MORE OF THE SAME
Treasury Secretary Timothy Geithner has said the law on the FX report, which requires the administration to determine whether U.S. trade partners are deliberately undervaluing their currencies, is a poor tool to push Beijing on the yuan.
Instead, the United States prefers to argue for change at regular closed-door meetings with Chinese officials. It also uses international economic forums, such as the Group of 20 leading nations and the International Monetary Fund, to ramp up public pressure on Beijing to move more quickly to a more-flexible currency.
China is the biggest foreign holder of U.S. Treasuries, with about $1.1 trillion, a position that gives it leverage in international economic negotiations. Foreign exchange traders had not expected a change of U.S. tactics.
“It’s not very surprising. It’s sort of sliding it in under the radar. They’re (Treasury) really not in a position to make any major moves at this point,” said Sean Incremona, an economist at 4Cast in New York.
The Treasury Department has not labeled a country a currency manipulator since July 1994, when it cited China. A designation would require the United States to step up negotiations with Beijing on the yuan’s value.
The yuan slipped on Tuesday as strong dollar demand from corporations offset a record high mid-point fixed by the People’s Bank of China. The central bank set an all-time high dollar/yuan mid-point in an apparent move to let the yuan rise a little more at the end of 2011 so as to make the yuan’s full-year nominal appreciation look bigger, traders said.
Some U.S. manufacturers, which have been hit hardest by competition from China and other emerging economies, would still prefer the U.S. government to take a harder line.
“China’s currency is still enormously undervalued,” said Scott Paul, executive director of the Alliance for American Manufacturing, an industry lobby for hard-hit textile, steel and labor groups.
“I’m disappointed that President Obama has now formally refused six times to cite China for its currency manipulation, a practice which has contributed to the loss of hundreds of thousands of American manufacturing jobs.”
Powered by WordPress -- XHTML 1.0