GM Lifts Pre-Market Mood in NY

Elena
13 Sep, 2007
New York City

U.S. stock futures were pointing to recovery Thursday on better-than-anticipated jobs data. The Labor Department said that initial jobless claims rose by 4,000 last week to 319,000, less than the 325,000 claims analysts expected. The report also stated low unemployment rate of 4.6%. Among pre-market highlights, McDonald''s rose 2% after it said it would increase its dividend by 50%. Microsoft gained 0.7% after it raised its quarterly dividend by a penny to 11 cents a share.

[R]09:00AM U.S. stock futures advanced on better-than-expected jobs data.[/R]

U.S. stock futures were pointing to recovery Thursday on better-than-anticipated jobs data. The Labor Department said that initial jobless claims rose by 4,000 last week to 319,000, less than the 325,000 claims analysts expected. The report also stated low unemployment rate of 4.6%. On the one hand, the unexpected drop in employment raised some concerns about the health of the economy, but on the other, it built on optimism that the Fed Reserve will cut interest rates at its next meeting on Sept. 18.

Among pre-market highlights, McDonald''s ((MCD)) rose 2% after it said it would increase its dividend by 50%. Microsoft ((MSFT)) gained 0.7% after it raised its quarterly dividend by a penny to 11 cents a share.

Dow member General Motors ((GM)) jumped 5.5% in pre-open trade on news that the car maker is planning a wage syste that would allow it to pay newly-hired workers less than veterans. Reportedly, the UAW are willing to create a union-controlled health-care trust fund.

The retail sector received a boost from Target Corp. ((TGT)) which rose 2% after saying it considers selling its $7 billion in credit-card receivables. Among companies driven by analyst comments, Merck & Co. ((MRK)) rose 1% in pre-open trade, following an upgrade to buy from neutral at Banc of America Securities.

In other corporate news, telecom equipment maker, Alcatel-Lucent (ALU)) declined as a result of another reduction of its revenue guidance. Syntax-Brillian ((BRLC)) dropped 22% after posting lower-than-forecast quarterly revenue.

After early declines, S&P 500 futures rose 5.6 points at 1,481.80 and Nasdaq 100 futures rose 7.75 points at 2,004.00. Dow industrial futures rose 40 points.

[R]U.S. jobless claims rose less than expected in the latest week.[/R]

Thursday morning, the Department of Labor released its report on initial jobless claims in the week ended September 8, showing that jobless claims rose less than economists had been expecting compared to the previous week. The report showed that jobless claims rose to 319,000 from the previous week's revised figure of 315,000. Economists had expected jobless claims to rise to 325,000 from the 318,000 originally reported for the previous week. The Labor Department also said that the less-volatile four-week moving average edged down to 324,000 from the previous week's revised average of 325,000.

Additionally, the report showed that continuing claims in the week ended September 1 fell to 2.585 million from the preceding week's revised level of 2.591 million. The smaller than expected increase in weekly jobless claims may help to offset some of the recent concerns about the labor market that were raised by the release of the August employment report last Friday. The August report showed that non-farm payrolls unexpectedly fell by 4,000 jobs following a downwardly revised increase of 68,000 in July. Economists had expected an increase of about 110,000 jobs compared to the increase of 92,000 originally reported for the previous month.