Markets Up Sharply on Jobs Report
Copyright By THE ASSOCIATED PRESS
Published: June 10, 2010
Stocks surged Thursday on Wall Street after positive reports on the United States jobs market and Chinese exports provided some relief to two issues that have had investors on edge for more than a month.
At midday, the Dow Jones industrial average was up 204.73 points, or 2.1 percent. The Standard & Poor’s 500-stock index rose 2.1 percent, while the Nasdaq composite index rose 1.8 percent.
Investors have sent stocks sharply lower for more than a month because of concerns that Europe’s sovereign debt crisis would slow economic growth worldwide and high unemployment would stall a United States recovery.
Asian and European markets rose after China said exports rose 48.5 percent in May, while imports jumped 48.3 percent. The jump in tradeprovides some relief that mounting debt problems in Europe might not halt a global economic recovery. The 27-nation European Union is China’s largest trading partner.
Economic recovery in China and other developing nations has outpaced a rebound in more developed economies, so a pullback there would deal a blow to global growth.
The euro, which is used by 16 countries in Europe, rose to $1.2129 Thursday. The currency has become an indicator of investor confidence in Europe’s economy. It has also heavily influenced global stock markets in recent weeks because of concerns that rising debt in countries like Greece, Spain and Portugal would upend a global economic recovery.
While investors worry about how Europe’s debt problems could affect the rest of the world, there are also concerns about continued high unemployment in the United States. High unemployment remains one of the biggest obstacles to a strong domestic rebound.
A Labor Department report Thursday said new claims for unemployment fell by a less-than-forecast 3,000 to a seasonally adjusted 456,000. While that figure fell short of economists’ forecast for a drop to 448,000, investors were heartened by data showing total claims last week dropped by the largest amount in almost a year. Total unemployment benefit rolls fell by 255,000 to 4.5 million.
The drop in total claims provides some hope that laid-off workers are starting to find new jobs. It was welcome relief after the Labor Department said last week that private employers slowed their hiring in May to the lowest levels since January.
Job creation is considered vital to a sustained recovery in the United States and consistently positive jobs data could provide confidence to investors after worries about Europe’s troubles have overwhelmed global markets for more than a month.
Julia Werdigier contributed reporting.