YAHOO [BRIEFING.COM]: Better-than-expected
unemployment numbers prompted participants to drive stocks to new 2009 highs in
the early going, but the news was quickly sold. In turn, Friday made for the
third straight session that stocks set fractionally better 2009 highs, but failed
to sustain gains.
An early, tepid tone quickly
turned positive as news that monthly nonfarm payrolls fell by their smallest
amount in two years. According to official statistics, private payroll cuts in
November totaled only 11,000, which is far less severe than the 125,000 job
losses that had been expected. The moderated November number and upward
revisions to job losses in previous months trimmed the official unemployment
rate to 10.0% from 10.2%. The unemployment rate had been expected to stand
still.
Another positive development
for the employment picture was the rise in the average work week to 33.2 hours
from 33.0 hours. The consensus called for 33.1 hours. Still, overall labor
market remains weak.
Nonetheless, the headline jobs
numbers were viewed positively and completely overshadowed news that factory
orders for October increased 0.6%, which is better than the flat reading that
had been expected, but not as strong as September's 1.6% increase.
The S&P 500 made its way
up 1.7% to fresh 2009 highs amid broad-based buying, but support soon faded,
which suggests that the good news had largely been priced into stocks. Still,
stocks showed some resolve by fighting through a couple of dips into negative
ground to finish with respectable gains.
Early gains by the stock
market came in the face of a stronger dollar, which also won favor amid the
pleasing jobs figures. However, as the greenback extended gains pressure
against stocks began to mount. Pundits warn that the dollar's advance could be
linked to potential interest rate hikes intended to curb inflation amid
economic growth. There remains concern, though, that preemptive rate increases
could dampen business conditions.
Interest in the dollar drove
the Dollar Index to a 1.4% gain, which makes for one of its best single-session
percentage advances this year -- the best came when the Dollar Index surged
1.8% in January. Still, the Dollar Index is up slightly more than 2% from its
52-week low, which was set last week.
With the dollar up, sellers
crowded around commodities and basic materials stocks. That sent the CRB
Commodity Index down 1.0%. Precious metals were particularly weak; gold settled
4.0% lower at $1169.00 per ounce. Gold stocks gave up 4.6% as the materials
sector logged a 1.2% loss.
Oil prices surrendered an
early gain of more than 1% to settle with a 1.1% loss at $75.65 per barrel.
That downturn dragged energy stocks to a 0.8% loss.
Financials finished with a
solid gain of 1.7%, though. Bank of America (BAC 16.20, +0.44) was a leader in the
sector again. The company priced an offering at $15.00 per common equivalent
security. The offering is expected to generate some $19.3 billion to help the
bank repay its TARP loan.
There weren't many other
corporate announcements, though Marvell Technology (MRVL 18.06, +1.53) posted
better-than-expected adjusted earnings of $0.35 per share for the third
quarter. The company went on to issue upside guidance for its fiscal fourth
quarter. The stock traded as a leader in the Nasdaq Composite and helped the
index hold up better than its counterparts against this session's reversal.
Trading volume was heavy this
session as more than 1.4 billion shares exchanged hands on the NYSE this
session. That was well above the 50-day moving average of 1.2 billion shares
and on par with the 200-day moving average of 1.4 billion. DJ30 +22.07 NASDAQ
+21.21 NQ100 +0.5% R2K +2.4% SP400 +1.4% SP500 +5.96 NASDAQ Adv/Vol/Dec
2001/2.29 bln/694 NYSE Adv/Vol/Dec 2167/1.47 bln/867