The stock market is a discounting mechanism, and that was never more evident over the past three days of trading, which saw anticipation of a report citing massive job losses for October send stocks reeling on the rumors, and then rally today on the actual news.
October Nonfarm Payrolls showed a decline of 240,000 jobs for the month of October, according to Labor Department statistics. The hardest-hit segments were retailing, construction, manufacturing and consumer finance, though almost no segment was spared. Unemployment spiked to 6.5%, the highest in 14 years. Thank you, George W. Bush, and good riddance.
On the news, investors seemed more relieved than worried, and the bottom-fishing sent stocks to a solid finish for the day, though the indices finished roughly 4% lower than where they had started. Following a dismal October, November is starting off not much better.
Dow 8,943.81 +248.02; NASDAQ 1,647.40 +38.70; S&P 500 930.99 +26.11; NYSE Composite 5,871.98 +204.58
Market internals offered a solid reflection of the buoyant trade to end the week. Advancers outnumbered losers, 4166-2122. New lows beat down new highs, once again, 331-10.
Volume on Friday was the lightest of the week.
NYSE Volume 1,226,627,000
NASDAQ Volume 1,915,632,000
Commodities stabilized. Oil was up 27 cents to $61.04. Gold gained $2.00 to $734.20, while silver slipped 9 cents to $9.96. Overall, it was an historic week that ended on a bright note, despite those horrid jobless numbers.
The market will likely continue to plumb the bottom for weeks.
Friday, November 7, 2008
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