While you were sleeping: Payrolls in focus

Friday 8th May 2015

Wall Street advanced amid better than expected corporate earnings including from Alibaba as well as positive weekly jobless claims data.

A Labor Department report showed initial claims for state unemployment benefits rose a mere 3,000 to a seasonally adjusted 265,000 for the week ended May 2. The data were better than economists had expected and offset Wednesday’s disappointing ADP payrolls statistics.

All eyes are now on Friday’s government jobs numbers to help gauge if the US labour market held steady or moved in line with weakening consumer sentiment and GDP.

"A lot of the market is really focused on Friday's payroll report which should give us a good indication if the weak first quarter data was really due to just weather," David Carter, chief investment officer at Lenox Wealth Advisors in New York, told Reuters.

A Reuters survey of economists forecast nonfarm payrolls increased 224,000 in April, while a Bloomberg survey of economists predicted a 230,000 gain.

“Payrolls will be a very important number,” Mike Moran, a senior strategist in New York at Standard Chartered, told Bloomberg. “It’ll really give us a much clearer read on the strongest part of the US economy, which is undoubtedly the labour market.”

In late trading in New York, the Dow Jones Industrial Average rose 0.64 percent, the Standard & Poor’s 500 Index added 0.43 percent, while the Nasdaq Composite Index advanced 0.54 percent. US Treasuries and the US dollar also rose.

Gains in shares of Home Depot and those of Visa, last up 2 percent and 1.4 percent respectively, helped propel the Dow higher.

Shares of Alibaba climbed, last up 7.7 percent, after the company reported better than expected revenue and appointed a new chief executive officer. Daniel Zhang will become CEO on May 10, taking the helm from Jonathan Lu.

"It was a very good quarter which is especially important considering there were a lot of expectations that the results would not come in strong," Gil Luria of Wedbush Securities told Reuters. "Sentiment is going to swing back to the favourable side.”

Shares of Yahoo, which owns a stake in Alibaba, also gained, last up 5.5 percent.

Shares of Yelp jumped, last up 18.8 percent, after the Wall Street Journal reported the company is exploring a sale.

On the flip side, shares of Whole Foods sank, last 9.4 percent weaker, after the company posted quarterly same-store sales growth that slowed more than analysts had expected.

In Europe, the Stoxx 600 Index finished the session marginally higher from the previous close, ending at 388.98. Germany’s DAX rose 0.5 percent. France’s CAC 40 Index fell 0.3 percent, while the UK’s FTSE 100 Index fell 0.7 percent.

BusinessDesk.co.nz

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