Wall Street Rally Fizzles

Tepid job gains cause U.S. stocks to stall, Europe continues gains on bond buying plan.

A weaker than hoped for August employment report threw cold water on Thursday’s rally on Wall Street, although European markets continued to rise as investors basked in the afterglow of the promised support for the region’s weaker countries.


The S&P Retail Index rose 0.4 percent, or 2.28 points, to 658.08, and the Dow Jones Industrial Average inched up just 0.1 percent, or 14.64 points, to 13,306.64. Both indexes were up 1.9 percent on Thursday.


There were some break-away fashion stocks, though. Quiksilver Inc., jumped 16.7 percent to $3.57, and Lululemon Athletica Inc., increased 12.5 percent to $77.14. Quiksilver’s third-quarter adjusted earnings per share came in at 9 cents, 4 cents better than analysts expected. And Lululemon’s second-quarter EPS tallied 39 cents, 8 cents better than projected.


Tumi Holdings Inc. also rose 9.9 percent to $25.22.


But Wall Street in general was like a balloon that stopped inflating.


On Thursday, the ADP National Employment Report showed that August payrolls in the private sector expanded by 201,000 versus July. But the Labor Department said total employment gains, including government jobs, were just 96,000 versus the 145,000 economists expected.


In Europe, European Central Bank president Mario Draghi continued to hold the spotlight. On Thursday, he confirmed that the bank would buy bonds from euro zone countries, including Spain and Italy, in order to cap their unsustainable interest rates.


Yields on Spain and Italy’s bonds fell in response to the promised support.


The FTSE MIB in Milan finished up 2.1 percent to 16,110.27, followed by the DAX in Frankfurt, which gained 0.7 percent to 7,214.50. The FTSE 100 in London ended up 0.3 percent to 5,794.80, while the CAC 40 in Paris also closed up 0.3 percent, to 3,519.05.


Among those gaining were Burberry, up 4.7 percent to 13.74 pounds; Richemont, 3.4 percent to 63.25 Swiss francs; French Connection, 2.1 percent to 24 pence, and Mulberry, 2 percent to 13.30 pounds.


Those that fell included Safilo Group, down 3.1 percent to 6.19 euros; Inditex, 6.7 percent to 89.13 euros, and Hermès, 0.3 percent to 226.70 euros.


The pound traded for $1.59 while the euro went for $1.26 and the Swiss franc for $1.05.