Bloomberg News

U.S. Stock Futures Extend Gains After Payrolls Top Forecasts

January 06, 2012

Jan. 6 (Bloomberg) -- U.S. stock futures extended gains after growth in jobs topped estimates last month and the unemployment rate unexpectedly dropped, bolstering optimism in the world’s largest economy.

Futures on the Standard & Poor’s 500 Index expiring in March advanced 0.5 percent to 1,279.1 at 8:32 a.m. in New York.

The 200,000 increase last month followed a revised 100,000 gain in November that was smaller than initially estimated, Labor Department figures showed. The median projection in a Bloomberg News survey called for a December gain of 155,000. The unemployment rate unexpectedly fell to 8.5 percent, the lowest since February 2009, while hours worked and earnings climbed.

The S&P 500 is up 1.9 percent this week after ending 2011 almost unchanged.

Most U.S. stocks rose yesterday, with the S&P 500 remaining at the highest level since Oct. 28, as banks rallied and ADP Employer Services said payrolls climbed more than forecast, offsetting reduced profit forecasts at companies including Target Corp. and J.C. Penney Co.

Alcoa is scheduled to mark the unofficial start of the fourth-quarter earnings season on Jan. 9. Profit at S&P 500 companies rose 6.2 percent during the September-December period, according to analyst estimates compiled by Bloomberg, which would mark the slowest growth since the third quarter of 2009.

U.S. stock mutual funds that invest in domestic equities had their second-worst redemptions last year as record market swings sent investors to the perceived safety of bond funds.

Investors pulled an estimated $132 billion from mutual funds that invest in U.S. stocks, the fifth straight year of withdrawals for domestic funds, according to preliminary data from the Investment Company Institute, a Washington-based trade group whose numbers go back to 1984.

To contact the editor responsible for this story: Michael P. Regan at mregan12@bloomberg.net


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