August 7, 2022

Stocks Gain on Potential Jobs Improvement

The government said the number of people who made first-time claims for unemployment benefits dropped to 418,000 last week, slightly below estimates and the lowest figure in seven weeks.

And Automatic Data Processing, a private payroll processor, said companies added 157,000 employees in June. That’s more than double the figure economists had forecast and far higher than the 36,000 added the previous month.

The two reports come a day before the Labor Department releases its monthly look at employment. Economists estimate the unemployment rate will remain at 9.1 percent and that employers added only 90,000 jobs last month.

In afternoon trading, the Dow Jones industrial average added 124.39 points, or 0.99 percent, to 12,750.41. The broader Standard Poor’s 500-stock index gained 16.77 points, or 1.25 percent, to 1,355.99, and the technology-heavy Nasdaq composite rose 43.50 points, or 1.53 percent, to 2,877.52.

Major retailers were also reporting improved June sales figures. Target, Costco Wholesale and Limited Brands were among those posting results that beat Wall Street estimates.

Stock indexes managed slight gains Wednesday even after a report showed the American service industry expanded at a slower pace last month.

Trading has been light so far this week. Markets were closed on Wall Street on Monday for the July 4th holiday.

In Europe, most markets advanced after the European Central Bank raised interest rates to 1.5 percent.

Stock indexes in London, Paris and Frankfurt were all up more than 0.8 percent in afternoon trading. Inflation in the 17 countries that use the euro is running at 2.7 percent in the year to June, above the central bank’s target of keeping price increases at just below 2 percent.

Earlier in Asia, stocks eked out modest gains despite the People’s Bank of China’s decision Wednesday to raise interest rates once again as it tries to put a lid on inflation.

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