U.S. Stocks Rebound on Positive Job Data and Stability in Monetary Policy

Strategic Insights -

U.S. stocks saw a strong rebound on Wednesday as investors welcomed positive job data and a stable monetary policy decision from the Federal Reserve. Despite concerns over the eurozone, the Dow Jones industrial average surged 1.53 percent, with the Standard & Poor's 500 and Nasdaq Composite Index also experiencing significant gains. Meanwhile, the Federal Reserve announced that it would hold the monetary policy steady, alleviating fears of a U.S. dollar decline. On the economic front, Automatic Data Processing reported a notable increase in private sector jobs, which helped to ease concerns over the employment situation.

Key Takeaways:

  • The Dow Jones industrial average rose 178.08 points, or 1.53 percent, to 11,836.04, with the Standard & Poor's 500 and Nasdaq Composite Index also experiencing significant gains.
  • The Federal Reserve announced that it would hold the monetary policy steady, with no additional measures implemented after a two-day monetary policy meeting.
  • Automatic Data Processing reported that 110,000 jobs were added to the private sector in October, indicating an improvement in private sector employment.
  • Germany and France urged Greece to make a decision by mid-December on whether to leave the eurozone, as Athens announced that it would leave the fate of the bailout plan to the voters.
  • S&P Capital IQ maintained a neutral allocation due to lingering European sovereign debt concerns, believing the eurozone situation to be unsettling and ephemeral.

Statistics:

  • Dow Jones industrial average: +178.08 points, or 1.53 percent, to 11,836.04
  • Standard & Poor's 500: +19.62 points, or 1.61 percent, to 1,237.90
  • Nasdaq Composite Index: +33.02 points, or 1.27 percent, to 2,639.98
  • Federal Reserve monetary policy decision: steady
  • Private sector jobs added: 110,000 in October, as reported by Automatic Data Processing
  • U.S. crude oil price: rose 32 cents, or 0.35 percent, to settle at 92.51 dollars a barrel
  • Brent crude price: fell 20 cents to close at 109.34 dollars a barrel

Sources:

  • Xinhua (via COMTEX), November 2, 2011
  • S&P Capital IQ