Friday, October 5, 2007

Market Powers Ahead on Jobs Data

It was a win-win situation for stocks on Friday. A solid jobs report would show a strong economy. A weak report would prompt the Fed to cut rates again at their next meeting. At 8:30 am, traders got more than they bargained for when the Bureau of Labor standards announced 110,000 new jobs created in September, plus revisions to both August and July reports.

Most outstanding was the August revision, up to a gain of 85,000 jobs from a previously-reported loss of 4,000. The Bureau said, "Nearly half of the over-the-month increase in the labor force occurred among teenagers; this offset a labor force decline among that group in August."

In other words, kids went away to college and took up new jobs. It's barely believable and in no way responds to questions about the mysterious August revision. Generally, it is probably pure bunk.

Nonetheless, stocks went on a tear.

Dow 14,066.01 +91.70; NASDAQ 2,780.32 +46.75; S&P 500 1,557.59 +14.75; NYSE Composite 10,247.93 +105.00

Volume was solid and advancing issues outnumbered decliners by a whopping 3-1 margin. New highs raced ahead, beating new lows, 442-118.

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Oil dipped slightly to close at $81.22. Gold was up $3.40 to $747.20 and silver lost a penny to $13.49.

Investors had their day - or two weeks - in the sun. On Monday, earnings will begin pouring in, and we'll see firsthand how solid these investment gains are. I would not dismiss this quarter as being one in which stocks sell off, even on good earnings. The market is in a completely overbought condition, priced to perfection, and if earnings are even a bit on the sluggish side, individual issues will be unloaded.

Have a great weekend!

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