US stocks surge on jobs, company news

WALL Street stocks have powered higher after better-than-expected US economic data on the weak labour market, positive company news and the first day of trading in global giant Hyatt Hotels. The Dow Jones Industrial Average jumped 174.57 points (1.78 per cent) to 9976.71 at 4:30pm GMT (3:30am AEDT) today.

The tech-heavy Nasdaq composite surged 43.72 points (2.13 per cent) to 2099.24, while the broad Standard & Poor's 500 index advanced 15.96 points (1.53 per cent) to 1062.46.

"Better-than-expected earnings, and reassuring guidance, from bellwether Cisco, along with some better-than-expected economic headlines, (have) set a positive tone," said Patrick O'Hare at Briefing.com.

Networking specialist Cisco, which recently joined the Dow index of 30 blue-chip shares, leapt 2.62 per cent to $US23.90 ($26.21) after reporting earnings and revenue above market expectations and forecasting higher sales in the current quarter.

Hyatt Hotels Corp. soared 8.88 per cent to $US27.22 ($29.85) in the second-biggest IPO in New York this year, after Banco Santander.

The Chicago-based global hotels and resorts chain floated 38 million shares priced at $US25 ($27.41) a share.

On the macroeconomic front, Labour Department data showed initial claims for US unemployment insurance benefits fell more than expected last week, lifting sentiment ahead of today's anxiously awaited government report on the October labour market.

Most analysts expect an October unemployment rate of 9.9 per cent, up from a 26-year high of 9.8 per cent in September.

Non-farm productivity soared a more than expected 9.5 per cent in the third quarter to the highest level in six years as companies shed staff, according to a separate Labour Department report.

"Following the reaction to the early economic news on 3Q productivity and weekly jobless claims, we would expect the session to quiet down as the day wears on as investors stand aside ahead of tomorrow's important October employment report," said Scott Marcouiller of Wells Fargo Advisers.

Joseph Hargett, analyst at Schaeffer's Investment Research, said the market was still digesting the Federal Open Market Committee's policy statement.

Traders are coming to "the sobering conclusion as to why the Fed decided to leave interest rates at record lows for an extended period", he said.

"While the Fed believes that the economy is improving, the rates are staying low out of concern for the strength of the recovery."




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