Traders, Investors Relieved After Better-Than-Expected Jobs Report
UPDATED 08/05/11 11:20 a.m.
CHICAGO (CBS) -- Traders and investors alike are hoping for a turnaround in the markets Friday, particularly after the better-than-expected news in the unemployment report.
As CBS 2's Susanna Song reports, traders in Chicago are staying optimistic, after fear and worry prevailed as the morning began.
Around 8:30 a.m., morning traders at the Chicago Mercantile Exchange were on the floor, ready to work, but with a lot more weight on their shoulders. They watched the Dow Jones Industrials plummet 513 points Thursday from fears that the economy might dip back into recession along with the debt crisis in Europe.
It was the biggest one-day decline on Wall Street since December 2008, at the height of the Great Recession.
But John Brady, a Chicago-based senior vice president of financial derivatives broker MF Global, said he thinks the gains in the new unemployment numbers will quiet fears of another recession. The July unemployment report indicated that 117,000 new jobs were created nationwide, and unemployment dropped to 9.1 percent.
"As of today, the odds of a double-dip have receded a little bit," Brady said. "Until the job market starts to contract, and we see outright negative job growth or job losses, chances of a double dip are small. If the economy starts to shed jobs, all bets are off."
Immediately after the jobs report came out Friday, the stock market saw a little boost. The Dow jumped as many as 171 points, but gave up those gains by mid-morning.
"This morning's unemployment rates suggested that the economy – at least the employment economy – is not falling apart, so equities and risk assets have re-priced higher. This whole flight to quality safety trade has been unwound, so it's really kind of a collective sigh of relief in global markets," Brady said.
Brady went on to say it's important for investors and consumers to keep a close eye on what is happening in Europe with its debt crisis. He said a lot of market volatility is stemming from that region, and will continue until its leaders step up.
