Bloomberg News

U.S. Stock Futures Advance Before Payrolls, Jobless Data

September 07, 2012

U.S. stock futures rose to the highest in two years, indicating the Standard & Poor’s 500 Index will extend yesterday’s biggest rally since 2008, as investors awaited data on payrolls and unemployment.

Amazon.com Inc., the world’s largest online retailer, advanced 0.5 percent as it plans to expand its presence in the U.K. Audience (ADNC:US) Inc., a maker of sound processing chips used by Apple Inc., plunged 59 percent after saying it’s unlikely that Apple will use its products in the next iPhone.

S&P 500 (SPX) futures expiring this month rose 0.3 percent to 1,435.60 at 7:17 a.m. in New York, the highest level since at least Sept., 2010. Dow Jones Industrial Average futures added 34 points, or 0.3 percent, to 13,309 today. The S&P 500 yesterday surged to its highest level since January 2008 as the European Central Bank announced a bond-buying plan and reports fueled optimism in the U.S. economic recovery.

“The U.S. economy is doing reasonably well, though job creation is still poor,” said Jean-Paul Jeckelmann, chief investment officer at Banque Bonhote & Cie. in Neuchatel, Switzerland. “Corporations are still defending their margins and are reluctant to hire too rapidly. They try to manage their cost base as visibility remains poor. We all wait to see what will happen next on the fiscal front and the next budget.”

U.S. Payrolls

A Labor Department report at 8:30 a.m. in Washington may show that payrolls rose at a slower pace in August, keeping unemployment in the U.S. above 8 percent for a 43rd month.

An additional 130,000 workers were taken on last month following a 163,000 increase in July, according to the median forecast of 92 economists in a Bloomberg News survey. The jobless rate held at 8.3 percent, the survey showed.

The $1.9 trillion restored to U.S. equity prices in 2012 has pushed the Standard & Poor’s 500 Index within 10 percent of a record, more than 7 percentage points closer than any country among the world’s biggest stock markets.

Amazon advanced 0.5 percent to $252.70 in German trading. The company will hire 2,000 people in the U.K. in the next two years as it adds new offices and expands its presence in the country. Amazon yesterday unveiled a new line of bigger, faster and sleeker Kindle e-readers and tablets, presenting a fresh challenge to Apple’s (AAPL:US) dominance of the market with the iPad.

SunTrust Banks Inc. (STI:US) advanced 1.2 percent to $27 in early New York trading as the lender sold most of a stake that it bought in Coca-Cola Co. (KO:US) in 1919 for a $1.2 billion gain to help cover the costs of bad loans.

Boost Income

The transaction will boost third-quarter net income by about $750 million, or $1.40 a share, the Atlanta-based bank said yesterday. Proceeds of the sale will help the lender set aside $375 million to fund the repurchase of faulty mortgages and absorb a $250 million pretax charge tied to the writedown of soured loans.

Lana Chan, an analyst at BMO Capital Markets, upgraded her recommendation for SunTrust to outperform, the equivalent of buy, from market perform.

Coca-Cola added 0.8 percent to $38.47 in German trading.

Audience plunged 59 percent to $7.65 in early New York trading after the company late yesterday said it’s unlikely that Apple will use its processor IP in the next generation of mobile phones.

Separately, Deutsche Bank AG cut the stock to sell from buy, while JPMorgan Chase & Co. downgraded the company’s shares to neutral, the equivalent of hold, from overweight. Credit Suisse Group AG cut its recommendation for Audience to underperform, the equivalent of sell, from outperform.

To contact the reporter on this story: Corinne Gretler in Zurich at cgretler1@bloomberg.net

To contact the editor responsible for this story: Andrew Rummer at arummer@bloomberg.net


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Companies Mentioned

  • ADNC
    (Audience Inc)
    • $4.25 USD
    • 0.10
    • 2.35%
  • AAPL
    (Apple Inc)
    • $113.99 USD
    • 1.98
    • 1.74%
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