U.S. Stocks Surge After 2-day Slump; Fed Action Awaited

Nichole Harper
02 Nov, 2011
New York City

U.S. stocks soared after a 2-day slump as commodities rebounded. The dollar held firm after private employers added 110,000 net new jobs. Investors await Fed decision after a 2-day meeting. MasterCard soars after worldwide spending surges.

[R]11:40 AM New York – U.S. stocks soared after a 2-day slump as commodities rebounded. The dollar held firm after private employers added 110,000 net new jobs. Investors await Fed decision after a 2-day meeting. MasterCard soars after worldwide spending surges.[/R]

U.S. indexes soared more than 1.7% after private sector added more jobs and commodities rebounded from a two-day slump. Investors also awaited the decision of the Fed on interest rate, asset purchase programs and views on the economy.

Private companies in the U.S. added 110,000 employees in October according to the latest data released by the ADP Employer Services.

Federal Reserve rate setting committee is scheduled to complete its two day meeting today and rates hover near zero. However, investors building expectations of another round of asset purchase program as the inflation felt by most consumers stay ahead of what Fed estimates.

The S&P 500 index increased 1.9% to 1,241.03 and the Nasdaq index added 1.5% or 37.73 to 2,644.69.

European markets braved past Greek bond crisis and looked at the earnings region’s manufacturing measures. The euro was nearly flat $1.377 and yields on Italian bonds traded above 6%.

The European Financial Stability Facility delayed the sale of €3 billion 10-year bonds “due to market conditions.” The decision to delay the bond sale came after Greek Prime Minister George Papandreou asked a referendum to decide on the European Union bailout conditions.

Manufacturing growth in the euro zone slowed at a faster pace in the euro zone according to the latest private survey.

The final reading on the manufacturing index in the euro zone declined to 47.1 in October from 47.3 in the preliminary assessment according to the Markit.

The Eurozone Purchasing Managers Index declined for the third month in a row and was lower from 48.5 in September.

In Paris, the CAC-40 Index rose 23.40 or 0.8% to 3,091.73 and in Frankfurt the DAX Index increased 46.24 or 0.8% to 5,880.75.

German unemployment increased to 7% in October from 6.9% in September according to Federal Labor Agency located in Nuremberg.

Stock Movers

AOL Inc ((AOL)) increased $1.64 or 12% to $15 after the media and content services provider reported third quarter revenues declined 6% to $531.7 million. Ad revenues increased 8% and subscriber revenues declined 22%.

Adjusted operating earnings dropped 48% to $87 million and loss per share was 2 cents compared to $1.61 a share in the quarter a year ago.

Vonage Holdings Corp ((VG)) dropped 40 cents or 12.7% to $2.73 after it reported flat revenues of $217 million and net income surged three-fold to $24 million or 11 cents a share.

Stocks dropped after the churn rate in the September quarter increased to 2.7% from 2.4% in the quarter a year ago and company ended the quarter with 2.388 million net subscriber lines compared to 2.397 million at the end of June quarter and 2.399 at the of the quarter a year ago.

MasterCard Inc ((MA)) soared 7.2% or $24.30 to $358.60 after the payment processor reported sharply higher earnings.

Net revenues in the September quarter increased 27% to $1.8 billion from a year ago and net income surged 38% to $717 million from $518 million a year ago. Earnings per share increased to $5.63 from $3.94 a year ago.

Credit card spending worldwide increased 21% to $469 billion from $389 billion and debit card spending in the U.S. increased 23% to $97 billion in the rest of the world soared 35% to $62 billion.