US stocks were little changed today and UK stocks rallied for a third day after more jobs were created in the US than expected in September, helping to ease concerns the economy was heading back into recession.
Nonfarm payrolls increased by 103,000, while economists expected 60,000, and the unemployment rate held steady at 9.1 per cent, The government report also showed 99,000 more jobs added in July and August than initially reported.
While the report was not as strong as many investors wanted, it corroborated other mildly improved economic data that have helped to ease fears the global economy was weakening.
"This is critical, this is the most important data that we have seen this cycle," said Jack Ablin, chief investment officer at Harris Private Bank in Chicago. "This is going to get people's attention."
"This confirms that most of the negativity we have seen in the market is derived from the market itself and not the data," he said.
The Dow Jones industrial average gained 42.12 points, or 0.38 per cent, to 11,165.45. The Standard and Poor's 500 Index dropped 0.78 points, or 0.07 per cent, to 1,164.19. The Nasdaq Composite Index fell 10.09 points, or 0.40 per cent, to 2,496.73.
From a technical perspective, the S&P 500 remained in a downtrend. The index has been trapped in a range in the past few months, deteriorating into lower lows. The index's wide range is seen from about 1,100 to 1,250.
Analysts see the next important resistance level for the S&P 500 at 1,180, the index's 50-day moving average.
In the UK, the FTSE 100 index gained 15.5, or 0.3 per cent, to 5,306.76 at 2.55pm in London. The gauge has rallied 3.5 per cent this week as investors speculated policy makers will reach agreement to shield financial institutions from the European debt crisis and as the Bank of England expanded its bond-purchase program. The FTSE All-Share Index added 0.3 per cent today, while Ireland's ISEQ Index gained 0.2 per cent.
German stocks advanced, extending the benchmark DAX Index's rally to a third day, following the US employers' data.
The DAX Index gained 1 per cent to 5,701.79 at 3.28pmin Frankfurt after earlier falling as much as 0.7 per cent. The gauge jumped 8.2 per cent in the past two days as investors speculated European policy makers are working on measures to shield banks from the debt crisis. The broader HDAX Index also climbed 1.1 per cent today.
The Iseq was broadly flat, up 0.17 per cent to 2554.21 at about 3pm.
Investors are likely to stay focused on Europe. Optimism the region was ramping up efforts to resolve its sovereign debt crisis helped drive a 6 per cent rally in the S&P 500 over the last three sessions.
Germany and France were split ahead of crucial summit talks on Sunday over how to strengthen shaky European banks and fight financial market contagion to prepare for a possible Greek default, diplomats said today.
Yesterday, the European Central Bank said it was ready to buy bonds to provide longer-term cheap money for European lenders in need of funding.
Reuters
