December 4, 2010, Morningstar.com
U.S. stocks turned higher late Friday as Wall Street offered a subdued reaction to disappointing November jobs data that had some expressing doubt and forecasting an upward revision.
"The jobs number was surprising, and I’m wondering if next month we get a revision. I mean retail losses in November? The market is going to react to it, but you do have to take it with a grain of salt," said Marc Pado, U.S. market strategist at Cantor Fitzgerald, of the Labor Department’s report.
The report showed payrolls growth of 39,000 last month, far fewer than the 155,000 gain predicted by analysts surveyed by MarketWatch.
After two days of triple-digit gains, the Dow Jones Industrial Average (DJI) was up 2.7% for the week so far. It was lately up 23.62 points, or 0.2%, to 11, 386.03, with 20 of its 30 components on the rise.
Currently up 3% for the week, the S&P 500 Index (SPX) gained 3.89 points, or 0.3%, to 1,225.57, with natural-resource up the most among its 10 sectors.
The Nasdaq Composite (RIXF) gained 13.73 points, or 0.5%, to 2,593.08, with the technology-laden index poised for a weekly gain of 2.3%.
"There are definitely things that don’t smell right about it," said Pado, who pointed to the government’s finding that jobs were lost in retail, a sector that has been reporting robust sales, starting with back-to-school buying and continuing into the holidays.
Retailers have been saying things were looking up for the holidays, "so it seems they would be hiring and not firing," Pado said.
Separate reports had a gauge of the services industry showed a slight expansion in November and the government reported a 0.9% decline in factory orders for October.
For every two stocks that fell, three rose on the New York Stock Exchange, where volume neared 533 million at 3:50 p.m. Eastern.
Treasurys were mixed, with 10-year note yields, often used in determining consumer loans, back above 3%.
Gold and crude-oil futures climbed on the New York Mercantile Exchange, with gold above $1,400.00 an ounce and oil topping $89 a barrel.
Wall Street’s mild reaction to the jobs report could be an indication that people are "not believing the report so much," said Jeffrey Kleintop, chief market strategist at LPL Financial.
"It doesn’t really change the view of the economy, which is muddling along," Kleintop added.
Cantor Fitzgerald’s Pado argues that the uptick in the unemployment rate is actually positive in that it signals Americans who had given up were re-entering the labor pool in anticipation that the climate was improving.
"Workers see the prospect for jobs coming down the pike here," Pado said.