S&P 500 Index Likely to Surpass Best Gains in a Decade

Nichole Harper
22 Oct, 2013
New York City

Stocks on Wall Street extended gains and are likely to surpass the advances in 2009 and 2003. Employers added net new 148,000 jobs in September and unemployment rate declined to 7.2%. Construction spending increased in August despite a fall in federal spending.

[R]12:20 PM New York – Stocks on Wall Street extended gains and are likely to surpass the advances in 2009 and 2003. Employers added net new 148,000 jobs in September and unemployment rate declined to 7.2%. Construction spending increased in August despite a fall in federal spending.[/R]

Stocks on Wall Street extended gains and widely followed S&P 500 index inched higher and is likely to cross the gains of 2009 and 2003.

Investors are increasingly speculating that the Fed will delay its taper plan to next year after the release of construction spending and jobs reports.

S&P 500 index exceeded more than 20% only two times in the last twelve years. In 2009, the index gained 23.5% and in 2003 the index advanced 25.3%.

For the year-to-date the S&P 500 index has gained 22.9%.

S&P 500 index increased 0.5% to 1,753.05 and the Nasdaq Composite Index increased 0.2% to 3,927.84.

In international markets, FTSE 100 index in London increased 0.4% or 25.26 to 6,679 and in Frankfurt the DAX index rose 0.2% or 16.17 to 8,883.

In Paris, CAC 40 index gained 0.3% or 11.75 to 4,289.

Jobless Rate 7.2%, Employers Added 148,000 Jobs

Employers at all levels added net new 148,000 jobs in September, according to a report released by the Department of Labor today.

The report was delayed by two and a half week by the government shut down that began October 1.

In a separate report based on a different survey sample, the department said the unemployment rate declined to 7.2% from 7.3% in the previous month.

Businesses added 126,000 jobs and government at all levels added 22,000 jobs. Transportation and construction and private sector professional and business services led the job growth.

July job increase was revised lower to 89,000 from 104,000 and August jobs revised up to 193,000 from 169,000.

Long term unemployment, people out of work for at least six months, declined 144,000 to 4.1 million but still represented 37% of all unemployed.

The monthly job gains have steadily declined each quarter in the year. Employers added 207.000 in the first quarter, 182,000 in the second quarter and 143,000 in the third quarter.

Construction Spending at 4-Year High

Construction spending in August increased 0.6% to an annual rate of $915.1 billion, the Commerce Department said today.

The spending rose to a high not seen since April 2009 was driven by an increase of 0.4% in public construction projects, fourth monthly increase in government spending despite a slowdown in federal spending.

Private residential construction spending increased 1.2% to a 5-year high.

U.S. Stocks in Review

Coach ((COA)) dropped 7% after the largest bridge-fashion handbag maker reported first-quarter sales of $1.15 billion, lower than expected by several analysts.

EMC Corp ((EMC)) declined 4% to $24.29 after the storage systems maker reported lower than expected earnings on a cut in the federal government spending. The computer system maker also lowered its revenues and earnings outlook.

Delta Air Lines Inc ((DAL)) jumped 5% to $25.76 after the U.S. airline reported better than expected quarterly profit on lower fuel costs and higher passenger count and higher fares.

Freeport-McMoran Copper & Gold Inc ((FCX)) gained 3% to $36.07 after the largest U.S. based miner reported better than expected third-quarter earnings on lower than expected cost of copper production and mining.

Netflix ((NFLX)) soared 5% to $374.10 after the streaming services provider subscribers exceeded analysts’ estimates and the pay TV channel HBO.

Transocean Ltd ((RIG)) soared 5.3% to $49.04 after the offshore drilling contractor was selected to replace Dell Inc in the widely followed S&P 500 index.

VMware Inc ((VMW)) soared 7% to $88.52 after the maker of storage systems software reported better than expected third-quarter profit.

Whirlpool ((WHR)) advanced 8% to $141.33 after the maker of home appliances lifted its annual earnings to $10.10 a share from the previous estimate of less than $10 a share.