Dow registers fifth straight weekly gain
U.S. stocks rose on Friday, 08 November 2013 after a stronger-than-expected October jobs report, leading to a record close for the Dow industrials and a fifth straight weekly gain for both the Dow and the S&P 500. Equities climbed throughout the session despite showing early signs of a potential continuation to prior session's weakness.
The Dow Jones Industrial Average climbed 167.80 points, or 1.1%, to end at 15761.78. The blue-chip index advanced 0.9% for the week. The Nasdaq Composite gained 61.90 points, or 1.6%, to close at 3,919.23. The S&P 500 rose 23.46 points, or 1.3%, to close at 1,770.61. For the week, the benchmark index was up 0.5%.
Stocks rallied with the financial sector paving the way after the group struggled to keep pace with the S&P earlier in the week. All major banks posted solid gains, and JPMorgan Chase surged 4.5%.
Before opening bell, it was announced that nonfarm payrolls increased by 204,000 in October (consensus 100,000). The immediate reaction was consistent with increased expectations of tapering sooner rather than later as bonds and futures fell to lows.
Taking another look through today's data, with the exception of government, every sector reported positive payroll gains in October. That included a 44,400 increase in retail employees. It has been reported that retailers started hiring earlier than normal for the holiday season.
Private payrolls added 212,000 new jobs in October, up from 150,000 in September. That was the biggest monthly gain since February when 319,000 jobs were added. The consensus expected only 110,000 new private jobs. The unemployment rate increased to 7.3% in October from 7.2% in September, as expected.
Separately, the November University of Michigan Consumer Sentiment Index dropped to 72.0 in the preliminary reading from 73.2 in October. The consensus expected the index to increase to 75.0. With the government shutdown over and the economy returning to its normal, albeit weak, trends, it was expected that consumer sentiment would return to September (77.5) or August (82.1) levels.
However, equity futures returned into positive territory by the opening bell while Treasuries settled on their lows with the 10-yr yield up 15 basis points at 2.75%. The dollar also strengthened, sending the Dollar Index higher by 0.5% to 81.24.
Elsewhere, the technology sector was the only cyclical group unable finish ahead of the broader market as top components traded in mixed fashion. Apple and Cisco Systems gained 1.6% and 1.7%, respectively, while IBM and Intel ended little changed.
Also of note, Twitter endured a forgettable second-day of trading after Hudson Square initiated coverage of the stock with a 'Sell' rating. The social media stock tumbled 7.2%.
A rally in the dollar index on this morning's strong U.S. jobs data weighed on precious metals. December gold slid below the $1300.00 per ounce level as the dollar index gained strength. The yellow metal fell from its session high of $1310.20 per ounce and touched a session low of $1280.50 per ounce in morning pit trade. Unable to gain momentum, it settled 1.8% lower at $1284.60 per ounce, booking a 2.2% loss for the week.
December silver also traded lower after slipping from its session high of $21.78 per ounce set moments after pit trade opened. It fell as low as $21.25 per ounce and eventually settled at $21.32 per ounce, or 1.6% lower. Today's decline brought losses for the week to 2.4%.
December crude oil chopped around in positive territory for most of today's pit trade despite the stronger dollar index. Numerous reports indicated that the U.S. is close to reaching a nuclear deal with Iran. The energy component touched a session high of $94.92 per barrel and closed with a 0.4% gain at $94.58 per barrel, ending the week just three cents below last Friday's closing price.
December natural gas extended gains for a fourth consecutive session as it advanced to a session high of $3.59 per MMBtu in late morning floor action. It eventually settled 1.1% higher at $3.56 per MMBtu, booking a 1.4% gain for the week.
Trading volume was well above average as 823 million shares changed hands on the floor of the New York Stock Exchange.
There is no economic data scheduled to be reported on Monday.
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