Stock futures jump on latest jobs report

NEW YORK — Stock futures moved sharply higher Friday after a new report showed July job losses were less than anticipated and the unemployment rate unexpectedly dipped.

Overseas markets also rallied on the U.S. jobs data.

In the latest sign the economy could be recovering faster than expected, the Labor Department said companies shed 247,000 jobs in July. Economists had expected 320,000 job cuts.

The unemployment rate dropped to 9.4 percent from 9.5 percent in June. Economists forecast the rate would rise to 9.6 percent.

“It’s a pretty good jobs number, (and) certainly trending in the right direction,“ said James Shelton, chief investment office at Kanaly Trust in Houston. “It’s not necessarily pointing to growth yet,“ but it shows deterioration in the economy is lessening, he added.

Investors had been bidding up stocks in recent months amid signs the ongoing recession was easing and slowly beginning its recovery. While still showing the economy is not back to normal, the latest jobs data provides further indication of improvement.

Ahead of the opening bell, Dow Jones industrial average futures rose 58, or 0.6 percent, to 9,287. Standard & Poor’s 500 index futures rose 8.00, or 0.8 percent, at 1,002.90, while Nasdaq 100 index futures jumped 18.75, or 1.2 percent, to 1,625.00.

The Labor Department’s report showed other encouraging signs as well. Workers’ hours moved higher after sinking to a record low in June and paychecks grew after having fallen or flat lined in some cases.

In corporate news, embattled insurer American International Group Inc. posted its first quarterly profit since 2007. The insurance giant, which is now majority owned by the government, reported a profit of $1.82 billion in the second quarter as some of its businesses stabilized.

The government has provided AIG with a loan package worth up to $182.5 billion and received an 80 percent stake in the firm after bailing it out at the peak of the credit crisis last fall.

Its shares jumped $4.31, or 19.1 percent, to $26.84 in premarket trading.

Investors were tentative on Thursday ahead of the monthly unemployment report. The Dow fell 25 points and other major indexes posted modest declines. The market had put the latest leg of its rally on hold this week after the Dow surged more than 13 percent over the previous four weeks on a bevy better-than-expected earnings reports.

Meanwhile, bond prices fell. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3.86 percent from 3.76 percent late Thursday. The yield on the three-month T-bill, considered one of the safest investments, rose to 0.18 percent from 0.16 percent late Thursday.

The dollar was mostly higher against other major currencies, while gold prices also rose.

Overseas, Japan’s Nikkei stock average rose 0.2 percent. In afternoon trading, Britain’s FTSE 100 rose 0.3 percent, Germany’s DAX index gained 1.2 percent, and France’s CAC-40 rose 0.7 percent.