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Saturday, September 4, 2010

Indications: U.S. stock futures cheer jobs report

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By Kate Gibson and Polya Lesova, MarketWatch

NEW YORK (MarketWatch) -- U.S. stock futures shot decisively higher Friday after the government's August employment report yielded better-than-forecast data on the jobs front, further lessening worries about the economic recovery.

"The data we've been receiving recently has been better than expected, and anything that exceeds expectations is bullish for the market," said Todd Schoenberger, managing director at LandColt Trading LLC.

The Labor Department said private employers added 67,000 jobs last month, with 54,000 jobs lost overall, mostly due to layoffs of temporary workers hired to conduct the Census. The unemployment rate climbed to 9.6%, as expected. Read about smaller-than-feared losses.

After lapsing slightly lower ahead of the data, futures on the Dow Jones Industrial Average shot up 140 points in its wake, and were lately up 116 points to 10,425.

S&P 500 futures gained 11.9 points to 1,101.5, while Nasdaq 100 futures added 23.75 points to 1,861.

Still, Wall Street's enthusiasm was likely tempered by the low volume already seen in August and especially ahead of the Labor Day holiday weekend.

"During ordinary trading days when there is heavy volume, this could be a 200-plus-point day," said Schoenberger.

The Dow /quotes/comstock/10w!i:dji/delayed (DJIA 10,448, +127.83, +1.24%) gained 0.5% Thursday, ending higher for the third session in a row.

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The ISM non-manufacturing gauge for August will be released at 10 a.m. Eastern.

This afternoon, Dennis Lockhart, president of the Federal Reserve Bank of Atlanta, is scheduled to speak in Tennessee about the economy.

Asian markets finished higher overnight, and European stocks rose in the wake of U.S. data. The Stoxx Europe 600 index /quotes/comstock/22c!sxxp (ST:SXXP 260.40, +2.22, +0.86%) rose 1.2% in afternoon trading.

On the deals front, Goldcorp Inc. /quotes/comstock/13*!gg/quotes/nls/gg (GG 42.84, -0.96, -2.19%) /quotes/comstock/11t!e:g (CA:G 44.49, -1.69, -3.66%) said it will acquire all outstanding shares of Andean Resources Ltd. /quotes/comstock/11t!and (CA:AND 6.98, +2.17, +45.11%) /quotes/comstock/22x!e:and (AU:AND 6.40, +1.51, +30.88%) for $3.4 billion. Andean's principal asset is the Cerro Negro gold project located in Argentina. Read more about Goldcorp's Andean Resources deal

In the energy sector, BP PLC /quotes/comstock/13*!bp/quotes/nls/bp (BP 37.43, +0.86, +2.35%) /quotes/comstock/23s!a:bp. (UK:BP. 401.70, +9.10, +2.32%) said the cost of the response to the oil spill in the Gulf of Mexico has soared to $8 billion. The oil giant is working to replace the failed blow-out preventer from the Deepwater Horizon drilling rig in order to allow operations to complete a relief well to resume.

In premarket trading, shares of Take-Two Interactive Software Inc. /quotes/comstock/15*!ttwo/quotes/nls/ttwo (TTWO 9.50, +0.65, +7.34%) rallied 15% after the firm reported an unexpected quarterly profit and said it expects a profit for the fiscal year. Read more on Take-Two.

Job losses continue, but at modest pace

The U.S. economy shed jobs for a third straight month, losing 54,000 nonfarm jobs, but the losses were half as bad as expected. The unemployment rate rose to 9.6%.

Shares of H&R Block Inc. /quotes/comstock/13*!hrb/quotes/nls/hrb (HRB 13.30, +0.73, +5.81%) rose in premarket trading after the tax-preparation company reported a smaller loss from continuing operations than the market expected.

Shares of Finisar Corp. /quotes/comstock/15*!fnsr/quotes/nls/fnsr (FNSR 15.60, +1.99, +14.62%) rose in premarket trade after the firm reported better-than-expected results.

Campbell Soup Co. /quotes/comstock/13*!cpb/quotes/nls/cpb (CPB 36.21, -1.11, -2.97%) said fiscal fourth-quarter earnings increased to 33 cents a share.

In the currency markets, the U.S. dollar was little changed against its major rivals. The euro /quotes/comstock/21o!x:seurusd (EURUSD 1.2893, 0.0000, 0.0000%) gained 0.1% to $1.2835.

The dollar index /quotes/comstock/11j!i:dxy0 (DXY 82.02, +0.64, +0.79%) , which tracks the performance of the greenback against a basket of other major currencies, edged lower to 82.413.

Kate Gibson is a reporter for MarketWatch, based in New York. Polya Lesova is MarketWatch's London bureau chief.

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