Related News
Stocks gain as traders take jobs report in stride
Source: Agencies |
January 9, 2010, Saturday
|
Online Edition
Online Edition
INVESTORS took a disappointing December jobs report in stride yesterday and focused on signs that the overall employment picture is stabilizing.
Stocks zigzagged for much of the day but ended higher after the Labor Department said employers added jobs in November but cut 85,000 jobs in December, far more than the 8,000 analysts had expected. The gain for November marked the first increase in nearly two years.
The Dow Jones industrial average tacked on 11 points, while broader indicators logged bigger gains. All the major indexes posted strong advances for the week.
The monthly jobs report is considered an important indicator of the economy's health. However, improvement in the job market has been lagging as other parts of the economy improve, such as manufacturing, housing and retail sales.
The jobs report reminded investors that the recovery is likely to continue to proceed in fits and starts. Figures from the previous two months were revised to show that the economy generated 4,000 jobs in November. But the revisions showed a loss of 16,000 more jobs than previously estimated in October.
"I don't think that anyone should expect a flip of a switch," said Linda Duessel, equity market strategist at Federated Investors.
The report also signals that many people are giving up on their search for work. The unemployment rate was unchanged at 10 percent.
A year ago, when the economy was still reeling from paralyzed credit markets and the collapse of several large banks, the Dow Jones industrial average fell 143 points on news that the unemployment rate had climbed more than expected to 7.2 percent during December 2008. Employers cut 524,000 jobs that month.
Analysts were divided on whether the report is a sign unemployment will continue to move higher.
Peter Cardillo, chief market economist at the brokerage Avalon Partners Inc. in New York, said the unemployment number was disappointing, but didn't change the trend. He noted many of the job losses were in the construction industry, which is likely due to seasonal slowdowns.
"It was a disappointment, but I think we're on the right track. I think unemployment will begin to show growth very shortly," he said.
The Dow rose 11.33, or 0.1 percent, to 10,618.19. The Standard & Poor's 500 index rose 3.29, or 0.3 percent, to 1,144.98, its fifth straight advance. The Nasdaq composite index rose 17.12, or 0.7 percent, to 2,317.17.
For the week, the Dow rose 1.8 percent, the S&P 500 index jumped 2.7 percent and the Nasdaq added 2.1 percent.
The robust climb was a welcome sign for 2010. Of the last 36 times when stocks carved gains in the first five days of January, stocks ended the year higher 31 times, or 86.1 percent of the time, according to the Stock Trader's Almanac.
Even with traders' calm reaction and the gains for the week, some analysts saw reason for worry in the jobs figures.
Mike Rubino, CEO of Rubino Financial Group in Troy, Michigan, was more pessimistic about the employment picture, saying the jobless rate would have been far worse had the size of the work force not fallen by 661,000. That drop signals more people are giving up on even trying to find a job.
Meanwhile, workers finding jobs are getting paid less, which means consumption and consumer spending aren't likely to soon improve to levels seen before the recession began in December 2007, Rubino said.
The "underemployment" rate, which factors in discouraged workers and part-time workers who would prefer full-time jobs, climbed to 17.3 percent from 17.2 percent in November.
Some of the concern about jobs was eased as the government reported that inventories held by wholesalers jumped in November as sales rose by the largest amount in 10 months.
The Commerce Department said that wholesale inventories rose 1.5 percent in November; analysts had expected a modest drop. Sales at the wholesale level rose 3.3 percent, well beyond the 0.9 percent gain analysts had forecast. The reports boosted hopes that higher sales will encourage businesses to rebuild depleted inventories.
Next week, investors will get reports on retail sales and industrial production. A handful of corporate earnings reports from the final quarter of 2009 will start to arrive. Aluminum producer Alcoa Inc. is scheduled to report its results after the closing bell on Monday.
Interest rates held in a narrow range on the bond market. The yield on the 10-year Treasury note was flat at 3.83 percent from late Thursday.
The dollar and gold both fell.
Three stocks rose for every two that fell on the New York Stock Exchange, where volume fell to 994.2 million shares from 1.2 billion Thursday.
The Russell 2000 index of smaller companies rose 2.59, or 0.4 percent, to 644.56.
Stocks zigzagged for much of the day but ended higher after the Labor Department said employers added jobs in November but cut 85,000 jobs in December, far more than the 8,000 analysts had expected. The gain for November marked the first increase in nearly two years.
The Dow Jones industrial average tacked on 11 points, while broader indicators logged bigger gains. All the major indexes posted strong advances for the week.
The monthly jobs report is considered an important indicator of the economy's health. However, improvement in the job market has been lagging as other parts of the economy improve, such as manufacturing, housing and retail sales.
The jobs report reminded investors that the recovery is likely to continue to proceed in fits and starts. Figures from the previous two months were revised to show that the economy generated 4,000 jobs in November. But the revisions showed a loss of 16,000 more jobs than previously estimated in October.
"I don't think that anyone should expect a flip of a switch," said Linda Duessel, equity market strategist at Federated Investors.
The report also signals that many people are giving up on their search for work. The unemployment rate was unchanged at 10 percent.
A year ago, when the economy was still reeling from paralyzed credit markets and the collapse of several large banks, the Dow Jones industrial average fell 143 points on news that the unemployment rate had climbed more than expected to 7.2 percent during December 2008. Employers cut 524,000 jobs that month.
Analysts were divided on whether the report is a sign unemployment will continue to move higher.
Peter Cardillo, chief market economist at the brokerage Avalon Partners Inc. in New York, said the unemployment number was disappointing, but didn't change the trend. He noted many of the job losses were in the construction industry, which is likely due to seasonal slowdowns.
"It was a disappointment, but I think we're on the right track. I think unemployment will begin to show growth very shortly," he said.
The Dow rose 11.33, or 0.1 percent, to 10,618.19. The Standard & Poor's 500 index rose 3.29, or 0.3 percent, to 1,144.98, its fifth straight advance. The Nasdaq composite index rose 17.12, or 0.7 percent, to 2,317.17.
For the week, the Dow rose 1.8 percent, the S&P 500 index jumped 2.7 percent and the Nasdaq added 2.1 percent.
The robust climb was a welcome sign for 2010. Of the last 36 times when stocks carved gains in the first five days of January, stocks ended the year higher 31 times, or 86.1 percent of the time, according to the Stock Trader's Almanac.
Even with traders' calm reaction and the gains for the week, some analysts saw reason for worry in the jobs figures.
Mike Rubino, CEO of Rubino Financial Group in Troy, Michigan, was more pessimistic about the employment picture, saying the jobless rate would have been far worse had the size of the work force not fallen by 661,000. That drop signals more people are giving up on even trying to find a job.
Meanwhile, workers finding jobs are getting paid less, which means consumption and consumer spending aren't likely to soon improve to levels seen before the recession began in December 2007, Rubino said.
The "underemployment" rate, which factors in discouraged workers and part-time workers who would prefer full-time jobs, climbed to 17.3 percent from 17.2 percent in November.
Some of the concern about jobs was eased as the government reported that inventories held by wholesalers jumped in November as sales rose by the largest amount in 10 months.
The Commerce Department said that wholesale inventories rose 1.5 percent in November; analysts had expected a modest drop. Sales at the wholesale level rose 3.3 percent, well beyond the 0.9 percent gain analysts had forecast. The reports boosted hopes that higher sales will encourage businesses to rebuild depleted inventories.
Next week, investors will get reports on retail sales and industrial production. A handful of corporate earnings reports from the final quarter of 2009 will start to arrive. Aluminum producer Alcoa Inc. is scheduled to report its results after the closing bell on Monday.
Interest rates held in a narrow range on the bond market. The yield on the 10-year Treasury note was flat at 3.83 percent from late Thursday.
The dollar and gold both fell.
Three stocks rose for every two that fell on the New York Stock Exchange, where volume fell to 994.2 million shares from 1.2 billion Thursday.
The Russell 2000 index of smaller companies rose 2.59, or 0.4 percent, to 644.56.
- About Us
- |
- Terms of Use
- |
-
RSS - |
- Privacy Policy
- |
- Contact Us
- |
- Shanghai Call Center: 962288
- |
- Tip-off hotline: 52920043
- 沪ICP证：沪ICP备05050403号-1
- |
- 互联网新闻信息服务许可证：31120180004
- |
- 网络视听许可证：0909346
- |
- 广播电视节目制作许可证：沪字第354号
- |
- 增值电信业务经营许可证：沪B2-20120012
Copyright © 1999- Shanghai Daily. All rights reserved.Preferably viewed with Internet Explorer 8 or newer browsers.
