U.S. Stock Futures Climb After ADP Report Shows Gain in Jobs

By Eric Martin

July 30 (Bloomberg) -- U.S. stock-index futures advanced after a private report showed that employers unexpectedly added jobs in July and oil retreated for a second day

Visa Inc. and Walt Disney Co., which are scheduled to report earnings today, helped lead the advance after ADP Employer Services said payrolls increased by 9,000 jobs this month. Continental Airlines Inc., the fourth-largest U.S. carrier, and General Motors Corp. gained as oil fell below $122 a barrel.

Standard & Poor's 500 Index futures expiring in September added 6.2, or 0.5 percent, to 1,267.9 at 8:50 a.m. in New York. Dow Jones Industrial Average futures increased 66 to 11,439 and Nasdaq-100 Index futures gained 14.5 to 1,856.5.

``The employment picture has held up much better than expected,'' said Lawrence Creatura, who helps manage $2.7 billion at Clover Capital Management Inc. in Rochester, New York. ``It's very difficult for the economy to collapse if people still have jobs. For the stock market, it may mean that some sectors which were depressed in anticipation of the consumer weakening may be mispriced.''

Economists surveyed by Bloomberg forecast the ADP report would show a decrease of 60,000 in jobs. The report, based on payroll data, also revised last month's decline downward to 77,000.

Visa, the world's largest credit-card network, added $1.63 to $77.60. Disney, the biggest theme-park operator, climbed 18 cents to $31.10.

Continental climbed 47 cents to $14.68 and GM rose 5 cents to $11.95. Crude oil for September delivery fell as much as 94 cents, or 0.8 percent, to $121.25 a barrel on the New York Mercantile Exchange.

Earnings Watch

Earnings have topped estimates at almost three-quarters of the S&P 500 companies that have reported second-quarter results so far even as profits slump 21 percent on average from a year earlier, according to data compiled by Bloomberg. As recently as July 3, analysts had forecast a drop of 11 percent in earnings.

Freddie Mac gained 59 cents to $9.01 and Fannie Mae added 71 cents to $12.31 after the U.S. Securities and Exchange Commission extended an emergency limit on short sales in shares of the mortgage-finance companies and 17 brokerages as it prepares broader rules to thwart stock manipulation.

The SEC pushed back expiration of its ban on so-called naked short sales of the firms' stocks to Aug. 12, the Washington-based agency said in a statement yesterday. The order aims to keep traders from driving down financial stocks to boost profits after Bear Stearns Cos. and IndyMac Bancorp Inc. collapsed amid rumors they were faltering.

OfficeMax Inc. slid 14 cents to $13.97. The third-biggest office-supplies retailer reported declining sales and a second- quarter loss of $894.2 million after writing down the value of its assets.

MetLife, Wyeth

MetLife Inc., the nation's biggest life insurer, tumbled $3.21 to $49.60. The company cut its full-year earnings forecast and said second-quarter net income fell to $946 million, or $1.26 a share, from $1.16 billion, or $1.48. Operating profit, which excludes investment losses, was $1.30 a share, missing the $1.51 average estimate of 19 analysts surveyed by Bloomberg.

Wyeth dropped $7.81 to $37.30 after its experimental Alzheimer's drug was linked to a brain-swelling side effect in a test. The company's drug, bapineuzumab, developed with Elan Corp., showed no benefit for the majority of Alzheimer's patients.

Moody's Drops

Moody's Corp., the world's second-largest credit-rating company, said second-quarter profit fell 48 percent to $135.2 million, or 54 cents a share, as demand slumped for ratings on mortgage bonds and collateralized debt obligations. Profit before one-time items was 51 cents, compared with the 47 cent average of seven analysts' estimates in a Bloomberg survey. The shares didn't trade in Europe.

Declining oil prices helped spark a 2.3 percent rally in U.S. stocks yesterday. Financial shares rose for the first time in four days, led by Bank of America Corp. and JPMorgan Chase & Co., as Merrill Lynch & Co.'s plans to sell $8.5 billion of stock and liquidate $30.6 billion of bonds bolstered speculation that Wall Street is overcoming failed subprime bets.

The S&P 500 has declined 19 percent from an October record as the collapse of the U.S. subprime mortgage market forced financial institutions worldwide to report $473 billion in writedowns and credit losses since the beginning of 2007. That prompted economists to forecast 1.5 percent growth in the U.S. economy in 2008, the slowest since 2001. Equities also suffered as inflation increased, giving the U.S. consumer price index the steepest gain since 1991.

Financial industry profits, which analysts estimated would fall 60 percent, have plummeted 87 percent. Record oil prices drove earnings of ConocoPhillips and Occidental Petroleum Corp. to the highest in their histories. The energy group of the S&P 500 has posted a 15 percent gain in earnings so far.

To contact the reporter on this story: Eric Martin in New York at emartin21@bloomberg.net.