Stock Futures in U.S., Commodities Climb, Treasuries Tumble on Jobs Report

U.S. stock-index futures and commodities rallied, erasing earlier losses, while Treasuries and the dollar tumbled after larger-than-forecast growth in jobs tempered concern that the economy was slowing.

Futures on the Standard & Poor’s 500 Index expiring in December climbed 1.1 percent to 1,170.8 at 8:40 a.m. in New York, after losing as much as 0.4 percent earlier. The S&P GSCI Index of 24 commodities rose 0.8 percent, extending its three- day advance to 6.2 percent for the best rally over a similar time period since 2009. Ten-year Treasury yields climbed 12 basis points to 2.11 percent and the Dollar Index lost 0.5 percent. European equities reversed earlier declines.

Payrolls climbed by 103,000 workers after a revised 57,000 increase the prior month, Labor Department data showed. The median forecast in a Bloomberg News survey called for a rise of 60,000. The gain including the return to work of 45,000 striking telecommunications employees. The jobless rate held at 9.1 percent.

"We’re not going into a recession," Nick Sargen, chief investment officer at Fort Washington Investment Advisors in Cincinnati, said in a telephone interview. His firm oversees more than $38 billion. "The market likes the report because the expectations were so much lower. People were overly pessimistic."

U.S. stocks rallied for a third day yesterday, extending the S&P 500’s rebound from a one-year intraday low on Oct. 4 to 8.4 percent, as European officials detailed plans to tame the sovereign debt crisis and reports on retail sales and jobless claims tempered concern that the economy would relapse into a recession.

Fourth Quarter Predictions

Wall Street strategists say the S&P 500 will post the biggest fourth-quarter rally in 13 years even after they cut forecasts at a rate exceeded only during the credit crisis.

The benchmark index for U.S. stocks will climb 15 percent in the fourth quarter to end 2011 at 1,300, according to the average estimate of 12 strategists surveyed by Bloomberg. The last time they were this bullish in October was 2008, when the group predicted a 27 percent gain and the index lost 18 percent.

The S&P 500 sank 14 percent in the third quarter and this week came within 1 percent of extending its decline from its April peak to 20 percent on a closing basis, the common definition of a bear market. The slump pushed the index to 12 times reported earnings, the cheapest valuation level since 2009, according to data compiled by Bloomberg.

To contact the editor responsible for this story: Michael P. Regan at mregan12@bloomberg.net

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U.S. Stock Futures Rally

Jin Lee/Bloomberg

Traders work at the New York Stock Exchange in New York.

Traders work at the New York Stock Exchange in New York. Photographer: Jin Lee/Bloomberg

3:52

Oct. 7 (Bloomberg) -- Employers added more payrolls than forecast in September, job gains were revised up in the prior two months and hours and earnings increased, helping ease concerns the U.S. labor market is deteriorating. Payrolls climbed by 103,000 workers after a revised 57,000 increase the prior month that was more than originally estimated, Labor Department data showed today in Washington. Betty Liu, Lizzie O'Leary and Michael McKee report on Bloomberg Television's "In the Loop." (Source: Bloomberg)

7:06

Oct. 7 (Bloomberg) -- Jan Hatzius, chief economist at Goldman Sachs Group, talks about the outlook for today's U.S. September non-farm payrolls report and the economy. Hatzius speaks with Erik Schatzker on Bloomberg Television's "InsideTrack." Jeffrey Sachs, an economics professor at Columbia University, also speaks. (Source: Bloomberg)