US Labor Market Showing Improvement
A flurry of encouraging economic data helped to boost U.S. stock futures, with the DJIA closing higher on Thursday at 11,364.21, a .95% increase; the S&P 500 also closed higher at 1,221.53, a 1.28% increase over the previous session.
With the holiday shopping season well under way, retailers are brightened by the better than expected November retail data, which they believe foretells a positive December and 2010. One major retailer, Abercrombie & Fitch, saw a surge in sales by 32% over the same period a year ago, which resulted in their stock price rising by nearly 10%; other American retail giants, such as Target and Costco, are also reporting gains, though nothing quite as spectacular as A&F’s. Overall, analysts are encouraged, saying that the rise in consumer spending, especially toward low-end retailers, suggests that the American economy is expanding, albeit slowly.
The pending U.S. home sales index also saw an unexpected rise; economists had predicted a drop of 1.5% but the figures showed a gain of 10.4%, which startled the markets and helped to boost stock futures.
Indications that the U.S. labor market is showing improvement is also bolstering investor sentiment; despite higher than forecasted new jobless claims yesterday, analysts say that the 4-week moving average is at its lowest point since August of 2008, and they expect to see 140,000 new private jobs when the non-farms payroll data is released later today.
Further, the improved stock futures suggest that investors, on the whole, are hopeful that the Eurozone’s debt issues will finally be contrained. While yesterday’s press conference, held by Jean-Claude Trichet, the ECB President, following the cessation of the ECB rate setting meeting offered no surprises, markets remain hopeful that the ECB will at some point move more boldly toward a resolution to the debt crisis, but are pleased that the ECB at least withdrew its original exit strategy plan.