Saturday, 7 December 2013

US stocks rise as unemployment falls

US stocks jumped on Friday to end a five-day losing streak. The S&P 500 rose 1.1 percent to end the week flat.

Stocks rose despite a strong employment report on Friday that raised the probability of the Federal Reserve reducing monetary stimulus. The Labor Department reported that the unemployment rate fell to a five-year low of 7.0 percent in November from 7.3 percent in October as nonfarm payrolls increased by 203,000.

Adding to the positive data on Friday, the preliminary reading of the Thomson Reuters/University of Michigan consumer sentiment index for December came in at 82.5, well up from 75.1 in November, after consumer spending had risen by 0.3 percent in October.

However, not all data on Friday pointed to a likelihood of a reduction of monetary stimulus. Personal income fell 0.1 percent in October, the first decline since January, after rising 0.5 percent in September, while consumer prices were unchanged.

Elsewhere in the world, Japan's economic recovery looks like it is maintaining momentum after a report on Friday showed that its index of coincident economic indicators rose 1.2 points in October and its index of leading economic indicators rose 0.7 point.

However, in Germany, a report on Friday showed that factory orders fell 2.2 percent in October after rising 3.1 percent in September.

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