Traders took their cues today from the Labor Department's highly anticipated nonfarm payrolls report for October, which revealed a steeper-than-forecast decline of 190,000 jobs for the month. The unemployment rate surged to 10.2% as a result, marking the first time in 26 years this indicator has climbed above 10%. As Wall Street digested the 22nd consecutive month of job losses, stocks started the day with a quick plunge into the red. However, the equities market shuffled its way back toward breakeven when a closer look at the report revealed a modest silver lining: payrolls for August and September were upwardly revised by a total of 91,000, suggesting that the pace of job losses is decelerating. Meanwhile, an early morning upgrade for Dow component General Electric (GE) added some loft to the major market indexes, with Bernstein analysts explaining, "In our view, the risk/reward balance has improved enough to warrant a more positive stance." In the end, a modest roller-coaster session left the Dow perched at its highest weekly finish in 13 months.
The Dow Jones Industrial Average (DJIA – 10,023.42) eventually settled for a gain of 17.5 points, or 0.2%, solidifying its foothold above the 10,000 level. In fact, today marks the Dow's first weekly close above this psychologically critical number since Oct. 3, 2008. Fourteen of the 30 blue chips trekked higher, led by GE and Travelers Companies (TRV), while Alcoa (AA) and DuPont (DD) finished flat. The remaining 14 stocks finished in the red, with Walt Disney (DIS) and American Express (AXP) blazing the path lower. For the week, the Dow added 3.2%.
The S&P 500 Index (SPX – 1,069.30) settled for a similarly modest gain of 2.7 points, or 0.3%, but added a respectable 3.2% on a weekly basis. The SPX reclaimed a foothold atop its 10-week moving average, after settling last Friday on the south side of this trendline. Finally, the Nasdaq Composite (COMP – 2,112.44) tacked on 7.1 points, or 0.3%, bringing its week-to-date advance to 3.3%. The COMP also jumped back above its 10-week trendline, but remains pinned below its 20-day moving average.
Turning to equities in focus, Citigroup (C) is planning to spin off its Primerica unit by way of an initial public offering (IPO) ... NVIDIA (NVDA) attracted a chemicals sector ... and today's Quote of the Day comes from Robert S. Khuzami, enforcement director for the Securities and Exchange Commission (SEC). As The New York Times reported, the regulatory agency is wrapped up in the sad case of trader Zvi Goffer, who is accused of spearheading a massive insider trading ring. In reference to a report that Goffer, after using a disposable mobile phone to disseminate illegal trading tips, literally chomped the phone's SIM card in half with his teeth to destroy evidence, Khuzami observed:
"If you find yourself chewing the memory card in your cellphone to destroy any record of your misconduct, something has gone terribly wrong with your character."
But these weren't the only headlines hitting the Street today. Click on the links below for our Daily Option Blog coverage of:
And, in case you missed it, Jocelynn Drake turned her Options Spotlight on Dow member DuPont (DD). Click here to watch the video.
For today's activity in crude oil, gold futures, options, and more, turn to page 2.
Crude futures were punished by today's unemployment report, as traders once again found themselves fretting over the persistently weak jobs market. With an increasing number of U.S. consumers out of work, commodity players quickly priced in their expectations for lackluster fuel demand. By the close, crude oil for December delivery shed $2.19, or 2.8%, to finish at $77.43 per barrel. Today's finish marked black gold's lowest closing price since Oct. 30, with the December contract edging just 0.6% higher for the week.
On the other hand, today's downbeat jobs data helped propel gold futures to yet another fresh record high. The U.S. dollar also muscled its way into positive territory, with both the greenback and the malleable metal reaping the benefits of their safe-haven status amid familiar economic fears. The most active December gold contract added $6.40 to finish at $1,095.70 per ounce, after earlier tagging a session high of $1,101.90 per ounce -- an all-time peak for a most active contract. On a weekly basis, gold futures added nearly 6%.
Levels to Watch in Trading:
Dow Jones Industrial Average (DJIA – 10,023.42) - support at 7,500; resistance at 10,500
S&P 500 Index (SPX – 1,069.30) - support at 950; resistance at 1,300
Nasdaq Composite (COMP – 2,112.44) - support at 1,650; resistance at 2,200
At the end of every market day, the staff at Schaeffer's Investment Research reviews the trading day in detail, covering major events and key market developments. Don't miss this critical, timely and insightful report. If you enjoyed today's edition of Market Recap, sign up here for free daily delivery straight to your inbox.
