Stocks and exchange traded funds jumped into positive territory this morning on upbeat employment numbers, which have fueled hope that the recession could be coming to an end.
The Labor Department said that companies handed out 247,000 pink slips in July, resulting in an overall drop in the unemployment rate from 9.5% to 9.4%. The report also showed that workers were getting more hours after falling to a record low in June. Paychecks also grew.
American International Group Inc. (AIG) reported its first quarterly profit since 2007. The troubled insurer reported profits of $1.82 billion and is aiming to spin off some of its assets to begin repaying its loans from the federal government. The profits were primarily driven by the stabilizing value of some its riskier investments, while its insurance results remain “challenged,” states Chairman and CEO Edward M. Liddy.
Fannie Mae posted a second quarter loss and is expected to ask for an additional $10.7 billion from the Treasury Department to continue operating. Sister company Freddie Mac is expected to release earnings later today. Together, with Fannie’s new request, the two companies will have gobbled up nearly $96 billion.
In the commodities world, white sugar rose to a 28-year high on concerns that adverse weather in sugar-producing parts of the world, such as India, will hinder supply. Prices have surged to their highest level for a most-active contract since April 1981, reports M. Shankar of Bloomberg. The news sent the iPath DJ AIG Sugar TR Sub-Idx ETN (SGG) up 3.5% in morning trading.
Overall all three major U.S. indexes reaped the benefits of a better-than-expected jobs report. The Dow Jones Industrial Average and the Nasdaq each added 1.6% while the S&P 500 gained 1.7%.
For more stories on sugar, visit our sugar category.
Kevin Grewal contributed to this article.