Bloomberg News

U.S. Stock Futures Maintain Gain as ADP Jobs Data Tops Estimates

August 01, 2012

U.S. stock futures maintained gains after a private report showed employers last month added more jobs than economists forecast, while investors focused on today’s policy statement from the Federal Reserve.

Futures on the Standard & Poor’s 500 Index expiring next month were up 0.3 percent at 1,378.9 at 8:16 a.m. in New York.

Companies in the U.S. added 163,000 workers in July, according to figures from ADP Employer Services. The median estimate in a Bloomberg News survey called for an advance of 120,000. Estimates of the 38 economists ranged from increases of 75,000 to 180,000.

The ADP report will be followed by the government’s monthly jobs data on Aug. 3. Non-farm payrolls probably grew by 100,000 in July and the unemployment rate lingered at 8.2 percent, according to the median forecast of economists in a Bloomberg survey.

The S&P 500 rallied 1.3 percent in July, its second successive month of gains, as euro-area policy makers pledged to preserve their common currency and speculation grew central banks will take measures to boost growth.

Federal Reserve Chairman Ben S. Bernanke will probably forgo announcing a third round of large-scale asset purchases today, and is more likely to wait until September to unveil plans to buy $600 billion in housing and government debt, according to median estimates of economists in a Bloomberg News survey.

`Door Open'

“Bernanke will leave the door open,” Larry Kantor, head of research at Barclays Capital, said on Bloomberg Television’s City Central. “He doesn’t want to disappoint market expectations too much but I don’t see the Fed making any move at all this week.”

Eighty-eight percent of economists say the Federal Open Market Committee will refrain from starting new purchases. Forty-eight percent say the FOMC will announce the buying at its Sept. 12-13 meeting, according to the July 25-27 survey of 58 economists.

Investors should buy stocks before the Fed’s announcement, if history is any guide, according to Bespoke Investment Group LLC. The S&P 500 has advanced on 20 out of the past 29 decision days since the Fed pledged to keep interest rates near zero in December 2008, a Bespoke study showed. Fed days accounted for about 38 percent of the equity gauge’s gain during the period, the data show.

A report at 10 a.m. in Washington may show the Institute for Supply Management’s factory index rose to 50.2 last month from 49.7 in June, according to the median estimate of 83 economists surveyed by Bloomberg News. Fifty marks the dividing line between expansion and contraction.

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


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