TOPICS > Economy

U.S. Jobs Report Offers Glimmer of Hope for U.S., European Markets

August 11, 2011 at 12:00 AM EST
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JUDY WOODRUFF: The stock market’s momentum shifted yet again today, and the Dow Jones Industrial Average gained more than 400 points. The surge made up most of the ground that was lost a day earlier.

The action was furious again on the New York Stock Exchange, but, this time, traders were chasing a rally. Stocks shot back up on signs the economy might not slide back into recession after all. The U.S. Labor Department announced first-time monthly claims for jobless benefits had fallen below 400,000 for the first time in four months. And Cisco Systems, a high-tech bellwether, reported better-than-expected profits.

It was a much-needed tonic, and when the bell rang, the Dow had gained 423 points, to settle at 11,143. The Nasdaq added more than 111 points, ending the day above 2,492.

In Holland, Mich., today, President Obama acknowledged the gyrations on Wall Street and political dysfunction in Washington, but he rejected appeals to call Congress back from its vacation.

PRESIDENT BARACK OBAMA: In the aftermath of this whole debt ceiling debacle and with the markets going up and down like they are, there’s been a lot of talk in Washington right now that I should call Congress back early. The last thing we need is Congress spending more time arguing in D.C.

(APPLAUSE)

BARACK OBAMA: What I figure is, they need to spend more time out here listening to you and hearing how fed up you are.

(APPLAUSE)

JUDY WOODRUFF: The U.S. jobs report also seemed to boost European markets, after they had been down for much of the day. French stocks again had to fight rumors about the health of the bank Societe Generale. Its value dropped 15 percent yesterday. Today, the bank asked for a government investigation into where the rumors originated.

MICHEL MARCHET, Societe Generale (through translator): Some people certainly thought there’s some money to be made by speculating on the bank stocks, so they cause a fall which has no concrete motivations, not based on facts. It is purely speculative. So, they cause the fall. Then it goes up again, and people pocket the profits.

JUDY WOODRUFF: And as the speculating continued across Europe, French officials late today banned the practice of short-selling. That’s when investors sell a security they do not directly own and promise to buy it back later, hoping the price will drop and they can cash in. Market leaders complained, it’s undermining confidence.

OLIVER ROTH, Close Brothers Seydler AG (through translator): It is a hysteric nervousness of the investors who are at the moment mainly speculators who are playing the markets. Serious long-term investors are staying away.

JUDY WOODRUFF: Investors were also keeping an eye on Italy, the second largest economy in Europe. The finance minister told Parliament today that tough measures are needed to balance the budget by 2013 and shield the country from the Eurozone debt crisis.