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The Globe and Mail

Premarket: Futures add to gains after payroll report

An investor, center, speaks to another while they look at the stock price monitor at a private securities company on  Aug. 3, 2012 in Shanghai, China


U.S. stocks index futures added to gains on Friday following the July nonfarm payroll report, which was stronger than expected.

S&P 500 futures rose 14.6 points and were above fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures added 111 points and Nasdaq 100 futures rose 31.5 points.

U.S. employers in July hired the most workers in five months, but an increase in the jobless rate to 8.3 per cent helped keep expectations of additional monetary stimulus from the Federal Reserve intact. Nonfarm payrolls rose 163,000 last month, the Labour Department said on Friday, beating economists expectations for a 100,000 gain.

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The report was dimmed somewhat by the increase in the jobless rate from 8.2 per cent in June, even as more people gave up the search for work. In addition, employment for May and June was revised to show 6,000 fewer jobs created than previously reported.

European shares and the euro surged and Spanish bond yields eased off their highs as investors decided the European Central Bank was committed to tackling the region's debt crisis despite taking no action this week.

The FTSEurofirst 300 index of top European shares was up 1.5 per cent at 1,070.93 points, on track for its ninth weekly gain in a row and extending its longest run of weekly rises since mid-2005.

Spanish 10-year yields were down 1.5 basis points on the day at a still elevated 7.07 per cent and off early highs of around 7.4 per cent.

Equivalent Italian yields were about 22 basis points lower on the day at 6.11 per cent, having risen as high as 6.45 per cent in early trade.

Brent crude gained 79 cents to $106.69 (U.S.) per barrel and on track for its highest close in two weeks. U.S. oil rose 98 cents to $88.11.

Spot gold was up 0.3 per cent at $1,594.76 an ounce, while U.S. gold futures for December delivery rose $7.10 an ounce at $1,597.80.

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