Stocks Soar On Upbeat Jobs Report

Stocks jumped after the non-farm payrolls report surprised economists, despite increasing fears of the taper.

Stocks skyrocketed on Friday after the Bureau of Labor Statistics reported that October’s non-farm payrolls increased by 204,000, dramatically beating expectations of a less-significant increase of 120,000 jobs. Although some may argue that the uptick in the unemployment rate from 7.2 percent to 7.3 percent made investors feel more confident that the Fed would not begin the taper of its bond purchases before March, the rise in the 10-year Treasury yield contradicted that theory. The ten-year Treasury yield jumped to 2.75 percent from Thursday’s close at 2.61 percent. Friday’s drop in Treasury bond prices drove investors to stocks. The iShares 20+ Year Treasury Bond ETF (TLT) took a 2.41 percent nosedive to $103.41.

The Dow Jones Industrial Average (DIA) picked up 167 points to finish Friday’s trading session at 15,761 for a 1.08 percent advance. The S&P 500 (SPY) jumped 1.34 percent to 1,770. Joe Friday: NYSE Attempting to Break this “Double Top”

The Nasdaq 100 (QQQ) soared 1.37 percent to finish at 3,366. The Russell 2000 (IWM) skyrocketed 1.94 percent to 1,099. How to Avoid the Worst Sector Mutual Funds

In other major markets, oil (USO) advanced 0.12 percent to close at $34.01.

On London’s ICE Futures Europe Exchange, December futures for Brent crude oil advanced $1.21 (1.17 percent) to $104.81/bbl. (BNO).

December gold futures declined $20.70 (1.58 percent) to $1,287.80 per ounce (GLD).

Transports climbed back above the cloud deck on Friday, with the Dow Jones Transportation Average (IYT) soaring 1.24 percent.

In Japan, the exchange rate for the yen was again the dominant factor in stock market activity. Japanese stocks sank on Friday as the yen gained unwanted strength. A stronger yen causes Japanese exports to be less competitively priced in foreign markets. The exchange rate for the yen rose to 98.10 per dollar just before Friday’s closing bell in Tokyo (FXY). The Nikkei 225 Stock Average sank 1.00 percent to 14,086 (EWJ).

In China, stocks continued to decline as investors remained anxious about the economic policy meeting scheduled for November 9-12 in Beijing. The fear factor outweighed a surprising report from the General Administration of Customs that China’s exports increased by 5.6 percent in October on a year-over-year basis, beating economists’ expectations for a 1.7 percent rise. The Shanghai Composite Index sank 1.09 percent to 2,106 (FXI). Hong Kong’s Hang Seng Index dropped 0.60 percent to end the day at 22,744 (EWH).

Stocks retreated moderately in Europe after Standard & Poor’s lowered its credit rating on France from AA+ to AA. The Euro STOXX 50 Index finished Friday’s session with a 0.27 percent decline to 3,034 – remaining above its 50-day moving average of 2,943. Its Relative Strength Index is 56.51 (FEZ).

Technical indicators revealed that the S&P 500 climbed further above its 50-day moving average of 1,710 after finishing Friday’s session with a 1.34 percent jump to 1,770. Its Relative Strength Index climbed from 54.06 to 61.36. Although the MACD remains below the signal line, it is on a level trajectory, suggesting that the S&P 500 could remain in the 1,770 range during the immediate future.

For Friday, all sectors finished in solidly in positive territory, except for the contrarian utilities sector, which declined 0.18 percent.

Consumer Discretionary (XLY): +1.59%

Technology: (XLK): +0.91%

Industrials (XLI): +1.35%

Materials: (XLB): +1.86%

Energy (XLE): +1.49%

Financials: (XLF): +2.33%

Utilities (XLU): -0.18%

Health Care: (XLV): +1.47%

Consumer Staples (XLP): +0.49%

Bottom line: The better-than-expected non-farm payrolls report for October sent stocks skyrocketing, as resulting concerns about a pre-March kickoff of the Fed’s tapering effort sent Treasury yields soaring and pushing more investors into stocks.

Disclaimer: The content included herein is for educational and informational purposes only, and readers agree to Wall Street Sector Selector's Disclaimer, Terms of Use, and Privacy Policy before accessing or using this or any other publication by Wall Street Sector Selector or Ridgeline Media Group, LLC.