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Stock Market News for November 2, 2012

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Benchmarks finished in the green on the first trading day of November banking on positive consumer confidence and private sector jobs data. In the aftermath of Hurricane Sandy’s havoc, investors drew strength from the slew of bullish economic reports. The consumer confidence index touched its highest level in more than four years. Investors will keep their eyes fixed on non-farm payroll data that is scheduled for release tomorrow. Industrials and materials were the major gainer among the S&P 500 groups. The S&P 500 registered its best day in seven weeks and the blue-chip index also scored its best day since September 13.

The Dow Jones Industrial Average jumped 1.0% to close the day at 13,232.62. The Standard & Poor 500 (S&P 500) surged 1.1% to finish yesterday’s trading session at 1,427.59. The tech-laden Nasdaq Composite Index rose 1.4 % to end at 3,020.06. The fear-gauge CBOE Volatility Index (VIX) tumbled 10.3% to settle at 16.69. Consolidated volumes on the New York Stock Exchange, American Stock Exchange and Nasdaq were roughly 6.7 billion shares, marginally higher than the daily average of 6.5 billion shares. Advancers outpaced the decliners on the NYSE; as for 74% stocks that gained, 22% stocks closed in the red.

Automatic Data Processing’s (NASDAQ:ADP) National Employment report revealed that the U.S. private sector added 158,000 jobs in the month of October in comparison to 114,000 in the month of September. This was above the Street’s estimates. According to the report, large businesses added 81,000 jobs, whereas medium and small businesses added 27,000 and 50,000, respectively, in the month of October. The service sector added 144,000 jobs, while goods producers accounted for 14,000 more jobs. Construction and professional/business services added 23,000 and 35,000 jobs, respectively. However, the manufacturing industry reported a decline of 8,000 jobs.

Separately, the U.S. Department of Labor released its initial claims report, according to which the number of Americans filing for unemployment has decreased from the previous week. According to the report, the advance figure for seasonally adjusted initial claims for the week ending October 27 decreased by 9,000 to 363,000 from the previous week’s 372,000. The reported was below consensus estimates of 372,000.

Meanwhile, the consumer confidence index touched its highest level since February 2008. According to the report, the consumer confidence index increased to 72.2 in October from 68.4 in September, beating the consensus estimate of 71.4. The present situation index increased to 56.2 from 48.7, while the expectations index increased to 82.9 from 81.5 recorded last month. The increase in consumer confidence was boosted by the improving job market.

Meanwhile, the ISM manufacturing index rose by 0.2 points to 51.7 in October from 51.5 in the month of September. This was above the consensus estimates of 51.2. New orders increased by 1.9% to 54.2, whereas the production index increased 2.9% to 52.4. The employment index declined by 2.6% to 52.1. According to market experts, the manufacturing sector has supported the U.S. economy in such difficult times.  

Meanwhile, construction spending edged up 0.6% from August to a seasonally adjusted annual rate of $851.6 billion in September. This was in line with consensus estimates of a 0.6% increase. The September 2012 figure is 7.8% above September 2011 estimates of $790.3 billion. Private and public construction spending increased by 1.3% and 0.8%, respectively.

Coming to corporate results, Pfizer Inc.’s (NYSE:PFE) revenues fell short of estimates. The company’s shares slipped 1.3% after the results. Exxon Mobil Corporation’s (NYSE:XOM) shares surged 0.5% after the company posted quarterly results. Profits came in above analysts’ estimates but slipped from the year-ago quarter.

The Materials Select Sector SPDR (XLB) gained 2.1% and was the major gainer among the S&P 500 industry groups. Stocks such as Monsanto Company (NYSE:MON), E I Du Pont De Nemours And Co (NYSE:DD), FMC Corporation (NYSE:FMC), Dow Jones Industrial Average (INDEXDJX:DJI) and PPG Industries, Inc. (NYSE:PPG) surged 0.9%, 1.1%, 2.2%, 2.8% and 4.0%, respectively.

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