Stocks rose for the second day in a row today after the U.S. service sector showed a continual increase, inspiring private companies to increase hiring. The U.S. service sector employs 90 percent of the workforce, which includes jobs in health care providers, banks, real estate and business other than manufacturing.
ADP, a payroll possessing company, stated that private companies added 91,000 jobs in September. ADP's numbers do not necessarily predict what the government's employment report will be, however, they do influence trader's expectations. Economists are still predicting that unemployment will remain current at 9.1 percent, despite the increase in stocks.
Some financial analysts are stating that the increase in the Stocks is because of a late day rally that was influenced by European officials implementing new efforts to support the region's struggling banks. If Greece defaults on their debt payments, then the European banks will take a huge loss causing Greek bonds to plummet in value. Many European banks have substantial holdings in Greek bonds.
Rob Stein, head of Astor Asset Management, stated "The market is trading on sentiment right now, not fundamentals. People are hoping that the bounce yesterday means that we've hit a bottom, but the problems that were in the economy Monday haven't changed since then.
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