12:50 PM New York – Stocks on Wall Street advanced and trimmed weekly and yearly losses after a string of positive earnings reported and construction industry expanded payrolls despite harsh weather conditions in January. Employers added less than expected 113,000 jobs, weak growth for the second month in a row.
Stocks on Wall Street gained in early afternoon after market indexes were whipsawed for about thirty after the release of monthly payroll data.
S&P 500 index increased 0.7% or 13.47 to 1,786.92 and the Nasdaq Composite Index added 1.2% or 47.78 to 4,104.95.
Investors sold stocks in the first hour of trading after the increase in payroll was weak for the second month in a row and jobless rate declined.
However, investors returned to buy more stocks after a steady stream of positive earnings announcements and despite the harsh winter weather in January construction industry expanded payroll by 48,000.
Jobless Rate Falls in January, Weak Growth in Payrolls
Economists were surprised by the smaller than expected increase in January employment data and harsh weather played a key role.
Despite the weather conditions, construction sector continued to show a sharp rebound but retailers trimmed payrolls for the second month in a row after the holidays and government continued to shrink.
U.S. employer’s at all levels added 113,000 jobs in January from the revised 75,000 in December, Department of Labor reported today in Washington.
Total employment in December was revised by 1,000 to 75,000 in December and November’s job growth was revised higher by 33,000 to 274,000.
Private employment increased 142,000 in January after adding 89,000 in December. And job growth averaged 194,000 a month last year and 186,000 in 2012.
In a separate survey the Labor Department estimated a decline in jobless rate despite the sluggishness in the job market. The jobless rate is determined using a separate household survey and at times the data does not match with the payroll job counts that is based on a survey of employers.
The unemployment rate in January declined to 6.6% from 6.7% in December, the lowest since October 2008 when the rate was 7.2%.
Construction sector expanded payrolls by 48,000 in January compared to previous month and manufacturing added 21,000. Travel and tourism sector added 24,000 jobs. Retail industry trimmed 12,900 jobs, the second monthly decline in a row, and healthcare sector payrolls were flat.
Government at all levels, including local, state and federal, cut payrolls by 29,000 jobs.
Average work week in the private sector was flat at 34.40 hours and average hourly earnings in the private sector increased 5 cents from December to $24.21. An increase of 1.9% from a year ago.
European markets rebounded at close and trimmed the losses in the year so far.
FTSE 100 index increased 0.2% or 13.4% to 6,572 and the DAX index added 0.5% or 45.3 to 9,302. The CAC 40 index in Paris soared 1% or 40.1 to 4,228.01.
European markets advance was also supported by a decision in German court to delay regarding the legality of the European Central Bank’s government bond buying program. The program has played a key role in rebuilding confidence in the euro zone markets.