4:30 PM New York – U.S. indexes soared after payrolls increased more than estimated in July sparking a rally. The S&P 500 index increased 1.8% and index in Europe soared between 3% and 6%. Commodities advanced. For the week the S&P 500 rose 0.4% and the Nasdaq Composite added 0.3%.
U.S. indexes gained after non-farm payrolls rose more than estimated in July but not enough to prevent the increase in the unemployment rate to a five-month high.
Market indexes opened sharply higher and added more as trading progressed. Banks, energy and industrial stocks and tech leaders participated in the rally.
The latest job report suggested a mixed picture as employers add more jobs and government continue to trim payrolls but the economy remains weak and most of the new job additions are on the low end of the pay scale.
However, earnings dominated the news and trading.
AIG second quarter net surged 27% and renamed its advisory services business. Apache second quarter net plunged 73% and Activision net declined 45%. Kraft Foods net rose 5.4% to $1.03 billion and set October 1 as the spin-off date.
Green Mountain Coffee third quarter soared 30% and Procter & Gamble fourth quarter net surged 45% and updated its outlook. Viacom second quarter net slipped 7% and Yelp said second quarter net loss widened but revenues rose more than expected.
Knight Capital surged after the troubled broker dealer is said to have completed its financing after a technology glitch cost the company $440 million loss and almost depleted its capital.
Blue Nile (NILE
) jumped more than 33% after the online jeweler reported better than expected quarterly earnings. Online employment profile site LinkedIn Corporation (LNKD
) soared 16% after it reported higher than expected revenues.
The European indexes edged higher after the euro zone retail sales increased in June but Spanish and Italian yields traded near critical levels. The benchmark index in Germany soared 3.9% and in France added 4.4% and in UK gained 2.2%. Market indexes in Italy and in Spain soared 6% but in Switzerland added 0.9%.
BHP said it will write down $3.3 billion of U.S. shale gas business and Australian nickel operations. RBS quarterly operating profit fell 22%.
Investors in Tokyo were cautious and participated in global market selloff and remained focused on domestic economy oriented companies. Sharp tumbled 28% and traded at a 3-decade low after it reversed its outlook to a loss and Sony fell 7% after it cut its full year estimate.
Australian markets declined following worldwide market selloff after central bank in Europe failed to offer immediate specific steps. BHP Billiton finally faced the expensive shale gas acquisition in the U.S. and wrote down assets by $2.5 billion and its Australian nickel operations by $450 million.
Commodities, Bonds and Currencies
The yield on 10-year bond traded higher to 1.57% and on 30-year bond increased to 2.65%.
The U.S. dollar inched lower to $1.235 to a euro and increased against the Japanese yen to 78.62 yen.
Immediate delivery futures of Texas crude oil increased $4.10 to $91.23 a barrel and Brent crude added $2.70 to $108.68, futures of natural gas decreased 4 cents to $2.87 per mbtu and gasoline price increased 5.3 cents to 292.29 cents a gallon.
In metals trading, copper increased 6.6 cents to $3.35 per pound, gold rose $15.50 to $1,601.20 per ounce and silver added 70 cents to $27.69.