US stock futures rise as jobs report shows gains

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Associated Press

Posted on October 5, 2012 at 9:04 AM

Updated Friday, Oct 5 at 9:36 AM

NEW YORK (AP) — U.S. stock futures are rising after a government report showed the U.S. unemployment rate fell below 8 percent for the first time in four years and the economy gained 114,000 jobs in September.

The report comes with just over a month to go before the U.S. presidential election.

Dow Jones industrial average futures gained 58 points to 13,556. The broader Standard & Poor's 500 futures rose 7.4 points to 1,463.20. Nasdaq 100 futures added 16.75 points to 2,838.25.

For much of the week, markets have been subdued ahead of the jobs report.

The Labor Department said the unemployment rate declined to 7.8 percent, matching its level in January 2009 when President Barack Obama took office.

Economists had expected the U.S. economy generated some 111,000 jobs during September and predicted that the unemployment rate inched up to 8.2 percent.

The increases reflect both hiring in September, and another 86,000 jobs created in July and August that had previously gone uncounted.

The news was not all rosy — many of the jobs added last month were part time, and the number of people with part-time jobs who wanted full-time work rose 7.5 percent, to 8.6 million. Nevertheless, the improvement in the headline number could impact the dynamics of the race between Obama and Republican challenger Mitt Romney, which largely centers on the economy.

Stocks were also rising in Europe on the news, adding to earlier gains.

The FTSE 100 index of leading British shares gained 0.8 percent at 5,875.99 while Germany's DAX rose 1.1 percent to 7,391.84. The CAC-40 in France was 1.6 percent higher at 3,456.57.

The gains in Europe came despite the price of Spanish debt rising to worrisome levels, as the government there resists tapping a new bond-buying program from the European Central Bank.

On Thursday night, Spain's finance minister Luis de Guindos insisted that the country "doesn't need a bailout." While the country may not want rescue loans for its government, it may still approach the eurozone's emergency funds, which would let the ECB to start buying Spanish bonds, keeping a lid on the country's near-term borrowing rates.

Earlier, Asian stocks advanced, with Japan's Nikkei 225 index closing up 0.4 percent at 8,863.30 after the Bank of Japan announced no change in the country's key interest rate following a two-day policy meeting.

South Korea's Kospi gained 0.1 percent to 1,995.17 and Hong Kong's Hang Seng added 0.5 percent to 21,012.38.

Markets in China are closed for a public holiday.

U.S. stocks to watch include Wet Seal Inc., after the troubled retailer's chairman and three board members stepped down, replaced by nominees from activist shareholder The Clinton Group, which had been waging a proxy fight in an attempt to oust the chain's leadership. Wet Seal shares rose 3.5 percent to $3.25 in premarket trading.

Zynga Inc. dropped sharply in premarket trading after the online game maker said that it expects a third-quarter loss due to weak demand for some of its titles and a charge related to an acquisition. The stock plunged 56 cents, or 19.7 percent, to $2.26 before the market open.

And Dow component Hewlett-Packard Co.'s shares fell 14 cents to $14.80 in early trading, after Moody's Investors Service said it was reviewing its investment-grade credit rating and may downgrade, after the PC maker cut its profit expectations.

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