U.S. stocks pulled world markets up this morning thanks to positive jobs data.  In July, initial claims for unemployment dropped 7,000 to 395,000, their lowest level since April. Jobs created in July totaled 117,000. 

The positive news distracted traders and investors from concerns about the euro zone banking system.   However, markets remain tentative after it was reported that an Asian bank cut the credit lines of major French lenders.  SocGen rose this morning after plummeting yesterday and BNP Paribas held flat. Trading in some Italian banks was suspended for excessive volatility.

President Obama's Priorities.   The positive jobs report and the strong market reaction come 3 days after President Obama said in a speech that the country needs to, and will, focus its resources on job creation.  The jobs speech was met with a lot of criticism and resoundingly maligned for not having enough substance.  Yet, it's obvious that an improved employment picture has a calming effect on the markets.  It also needs to be at the core of economic growth - otherwise, consumer spending will remain weak, which would lead businesses, in all likelihood, to cut back further on expenses and to reduce numbers of workers.  When revenues remain low, the only way for business to generate a profit is to cut jobs and other costs. 

The question, now, is whether or not the U.S. has the political wherewithal to create jobs.  [Reuters, 8/11/11]