(1888PressRelease)
November 07, 2009 - Charles Goh CEO and President at Takahashi Nakamura in Japan stated Thursday, “A bright forecast from Cisco Systems and upbeat economic news sent stocks soaring Thursday and propelled the Dow Jones industrials back above 10,000. The rally, coming a day before the government's October employment report, showed that investors are regaining their optimism about an economic recovery. The Dow bolted up 203 points, or 2 percent, while the Nasdaq composite index, led by Cisco's outlook, rose nearly 2.5 percent. The market's move continued a streak of volatility that began last month, but this latest surge was powered not by a single event, but by a wave of good news.”
Charles Goh continued, “Cisco Systems Inc. boosted hopes for the technology industry after the largest maker of computer-networking gear forecast revenue growth for the first time in a year. The forecasts of CEO John Chambers carry big weight on Wall Street and his announcement that the company would begin hiring workers injected a jittery market with confidence.”
The government said the number of newly laid-off workers seeking unemployment benefits fell to 512,000 last week, the lowest level since January and fewer than economists had forecast. Initial claims are considered a gauge of the pace of layoffs.
Worker productivity jumped by the most in six years, rising 9.5 percent in the July-September quarter. The government figures drove hopes that lower costs would boost corporate profits. The report also illustrated, though, that many employers remain reluctant to hire.
Retailers had higher sales for the second straight month in October after more than a year of sliding. The retail industry posted a 2.1 percent sales gain for October, according to an International Council of Shopping Centers-Goldman Sachs tally. Investors are looking for any sign that consumers are willing to spend more as the holiday shopping season approaches.
The reports gave investors a shot of optimism about the government's monthly report on employment Friday, which will steer trading because of the ties between joblessness and consumer spending. Analysts say spending must increase for the economy to have a sustained recovery. Economists project that the unemployment rate rose to 9.9 percent in October.
Charles Goh CEO and President at Takahashi Nakamura in Japan continued, ‘Investors will be looking at the average number of weekly hours worked and demand for temporary workers. That's because as the economy improves businesses will first ask employees to stay at work longer and will bring in more temps before manager’s gain enough confidence to hire.
In September, the number of weekly hours worked stood at a record low of 33, while the number of temporary workers fell by a modest 2,000 people.
Goh said improvements in these areas would bolster the idea the job market is healing.
"It will give legitimacy to the notion that the economy is picking up," he said.
The dollar was essentially flat against other major currencies. Gold prices rose.
Crude oil fell 78 cents to settle at $79.62 per barrel on the New York Mercantile Exchange.
Overseas, European shares recovered from early losses to end higher after central banks left interest rates unchanged. The Bank of England said it would pump more money into the economy after news last week that the country remains in recession.
Britain's FTSE 100 rose 0.4 percent, Germany's DAX index added 0.7 percent, and France's CAC-40 gained 1.1 percent. Japan's Nikkei stock average fell 1.3 percent.
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