Stock Market Update

[BRIEFING.COM] In the face of news that the unemployment rate climbed to a 25-year high, stocks managed to muster a modest gain, which gave the market its fifth straight advance.

Stocks started the session moderately lower as participants made a push against stocks after learning that nonfarm payrolls fell by 190,000 in October and that the official unemployment rate climbed from 9.8% to 10.2%, the highest level since 1983. The consensus had called for job losses of 175,000 and an unemployment rate of 9.9%.

The only other item on the economic calendar was a wholesale report that indicated inventories fell 0.9% in September. The consensus had predicted a 1.0% decline. That report had no real impact on trade, though.

Despite a downward start as a result of disappointing jobs data, stocks managed to make an upward turn in the early going, then spent the rest of the session chopping sideways in listless action.

Industrials managed to put together a strong gain. The sector settled 1.2% higher amid strength in industrial conglomerate General Electric (GE 15.33, +0.90), which benefited from a pair of analyst upgrades.

Amazon.com (AMZN 126.20, +5.59) was also given an upgrade, which helped it lead retailers to a 1.7% gain.

Financials lagged for the entire session and finished with a 0.5% loss. The latest bout of selling stemmed from a sharp drop by AIG (AIG 35.48, -3.80), even though the company posted a positive earnings surprise. The insurer credited improved and stabilized market performance. Still, weakness in AIG's shares took multiline insurers to a 1.5% loss.

Recent bouts of weakness among insurers have kept the financial sector from performing in-line with the broader market, which logged a weekly gain of 3.2%. Financials finished this week with a weekly gain of 1.8%.

Though it finished just 0.3% higher this session, the materials sector made a weekly gain of 5.0%, which is among the best weekly performances of any major sector. Gold stocks were key in that move. They advanced nearly 13% this week. That was capped off by this session's 3.8% advance as the yellow metal made its way to a new record high of $1101.90 per ounce before pulling back a bit to settle with a 0.6% gain at $1096.00 per ounce.

Gold's gains weren't enough to offset general weakness among other commodities and prevent the CRB Commodity Index from booking a 1.8% loss.

Advancing Sectors: Industrials (+1.2%), Consumer Discretionary (+1.0%), Health Care (+0.4%), Materials (+0.3%), Telecom (+0.3%), Consumer Staples (+0.3%), Tech (+0.1%)
Declining Sectors: Financials (-0.5%), Utilities (-0.3%), Energy (-0.2%)

..Nasdaq 100 +0.6%. ..S&P Midcap 400 -0.2%. ..Russell 2000 -0.1%.

[BRIEFING.COM] Gold garnered support in the face of weakness in the broader commodities space. The yellow metal made its way to a new record high of $1101.90 per ounce before pulling back a bit to settle at $1096.00 per ounce, which translates to a 0.6% gain.

Silver followed in early action, but faltered to settle with a 0.2% loss at $17.38 per ounce.

Energy performed poorly. As such, contracts for crude closed with oil priced 2.9% lower at $77.35 per barrel. Natural gas contracts closed at $4.60 each, down 3.8%.

In broader terms, the CRB Commodity Index fell a considerable 1.8%. That took it to a weekly loss of 0.3%.

[BRIEFING.COM] Utilities have been steady laggards this session. The sector is currently down 0.2%, though Edison International (EIX 33.29, +1.11) is sporting a hefty gain after bringing in better-than-expected earnings for the latest quarter and narrowing its outlook for fiscal 2009.

Electric utilities giant Dominion (D 36.02, +0.21) is also up, though to a lesser extent. The company reaffirmed its outlook for 2009 and 2010. Both forecasts are in-line with the current consensus estimate.

[BRIEFING.COM] This afternoon's action remains subdued, leaving stocks on track to finish the week on a lackluster note. In contrast, last week ended amid strong selling pressure and a spike in volatility. Participants returned to bid shares higher in each session this week, so that a weekly gain of more than 2% still looks to be in order. That will be its first weekly advance in three weeks.

Despite the recent spell of volatility in the broader market, the S&P 500 remains up 18% from 52-weeks ago. More impressive is that it is up 60% from its March low.

[BRIEFING.COM] This afternoon's action remains largely listless as the major equity averages continue to dance along the neutral line. Still, that has helped the S&P 500 keep intact its week-to-date gain of more than 2%.

The Nasdaq 100 is sporting a bit of an edge over the headline indices, however. It is currently up 0.4% amid gains by Amazon.com (AMZN 126.00, +5.39). Shares of the online retailer recently received an analyst upgrade.

[BRIEFING.COM] The stock market continues to drift along sideways. Gains remain strong among industrial stocks, which are up 1.3%, but financials continue to lag with a 0.4% loss.

Treasuries are having a rather quiet session. Accordingly, the benchmark 10-year Note is up just one tick, which has left its yield just above 3.5%.

[BRIEFING.COM] The major indices have kept to a relatively tight range, currently near the unchanged mark, as investors digest a worse-than-expected monthly jobs report and a slightly better-than-expected wholesale inventory reading.

October nonfarm payrolls fell 190,000 in October, which was worse than the expected decline of 175,000. Meanwhile, the unemployment rate rose to 10.2% from 9.8%, which was worse than the 9.9% consensus. The rise in unemployment was not due to more workers entering the workforce -- the labor force declined by 31,000 people as 259,000 workers left the workforce over the last month. The jump in unemployment was solely due to an increase in the number of unemployed.

Separately, wholesale inventories fell 0.9% month-over-month in September, which was slightly better than the -1.0% consensus.

Earnings have not had much of an impact on trade. AIG (AIG 35.61, -3.67) is trading lower despite topping quarterly estimates, while Starbucks (SBUX 20.98, +1.28) is trading higher after beating expectations and issuing upside FY09 guidance.

In commodity trading, the price of gold hit a record high of $1101.90 per ounce, while oil prices are under pressure, down 3.3% at $77.00 per barrel.

[BRIEFING.COM] Stocks return to positive ground and now post modest gains.  Seven of the ten sectors are now posting a gain.

[BRIEFING.COM] While the broader market is listlessly trading along the neutral line, airline stocks are making a strong push higher. In turn, the Amex Airline Index is up 2.7%.

Strength among air carriers is broad. Of the 13 members in the Amex Airline Index, only Ryanair Holdings (RYAAY 26.37, -0.12) is trading with a loss.

[BRIEFING.COM] The major indices continue to trade with modest losses, which remain rather broad. As such, declining issues outnumber advancers by 2-to-1 in the S&P 500 and Dow Jones Industrial Average.

Meanwhile, selling pressure has picked up against oil. In turn, contracts for crude are being priced 3.3% lower at $77.00 per barrel. Amid that slide and listless action in the broader equity market, energy stocks have fallen to a 0.4% loss.

[BRIEFING.COM] The stock market's early advance has rolled over, leaving the three major indices to return to negative territory. The drop, however, has only offset a small portion of the previous session's heady gain and stocks are still trending toward a week-to-date gain in excess of 2%.

Financials continue to be a drag; the sector is now down 1.1%. AIG (AIG 35.48, -3.80) is a primary laggard in the sector. Shares of the insurer have been shunned for the entire session, despite better-than-expected earnings for its latest quarter. AIG's weakness has spread to its peers and dragged multiline insurers, as a group, to a 2.8% loss.

Of the 10 major sectors, only consumer discretionary stocks (+0.1%) and materials stocks (+0.5%) are sporting gains.

[BRIEFING.COM] The U.S. dollar had garnered support in the minutes following a disappointing October jobs report, but it has since buckled so that the Dollar Index is down 0.2%. Despite the dollar's drop, commodities are seing mixed interest.

Gold prices have ascended to new record highs and currently sport a 0.7% gain at $1097.30 per ounce. Contracts had priced the yellow metal as high as $1101.90 per ounce.

Silver has followed suit. Prices for the precious metal are up 0.5% to $17.51 per ounce.

Oil has come under considerable pressure, though. Contracts for crude are being priced 2.7% lower at $77.50 per barrel.

Natural gas is also contending with selling. Contracts are being priced at $4.64 each, down 3.0%.

[BRIEFING.COM] Stocks are still trading with modest gains, which are generally broad based. However, financials are trading as noticeable laggards; the sector is down 0.5%.

Financials are being hampered by weakness among shares of diversified banks (-1.3%) and ongoing losses among shares of insurers (-1.6%).

Separately, wholesale inventories fell 0.9%, which was a tad less severe than the 1.0% declilne that had been widely forecast. Stocks haven't shown much reaction to the news.

[BRIEFING.COM] Weighed down by a disappointing jobs report, stocks started the session in negative territory, but they have since made a strong, upward move to positive territory.

Amid the upturn, shares of retailers are garnering particular support. As a group, retailers are up 1.5%. That's giving a lift to the consumer discretionary sector, which is up a solid 0.6%.

Industrials make up the best performing sector, though. Industrials are currently up 0.9% as General Electric (GE 15.16, +0.73) benefits from a pair of analyst upgrades.

 [BRIEFING.COM] S&P futures vs fair value: -5.80. Nasdaq futures vs fair value: -7.50.  News that the unemployment rate for October climbed more than expected to a 25-year high of 10.2% amid a steeper-than-expected decline in monthly nonfarm payrolls has sent stock futures markedly lower. In turn, a downward start for the major indices looks to be in order. The mood has also soured among participants in Europe, where markets have turned modest gains into sizable losses. The U.S. dollar has garnered modest support in the wake of the data, though. The Dollar Index is currently up 0.1%.

 [BRIEFING.COM] S&P futures vs fair value: -7.90. Nasdaq futures vs fair value: -11.00.  A disappointing U.S. jobs report has led Europe's major equity averages well into the red. As such, Germany's DAX is currently down 1.0%. Its declining issues hold a 3-to-2 advantage over advancers. In German economic news, Dow Jones reported that German manufacturing orders climbed a seasonally adjusted 0.9% in September, but that was slightly below the 1.0% rise that polled analysts had forecast. In Britain, the FTSE is off by 0.6%. Its decliners also hold a 3-to-2 edge over advancers. However, banks continue to garner particular support. That has favored HSBC (HBC), Lloyds Group (LYG), Standard Chartered, and Royal Bank of Scotland (RBS). RBS recently announced an operating loss of 1.5 billion pounds following bookings of 3.3 billion pounds of bad debts in the latest quarter. Financials are also providing a bit of support France's CAC, which is down 1.1%. BNP Paribas and Credit Agricole are among the few advancing issues in the 40-member index. Energy giant Total (TOT) is a primary laggard. In Asia, Japan's Nikkei put together a 0.7% increase as exporters climbed. Profit-taking, however, still weighed on gains. NEC surged after it announced a share sale of up to $1.5 billion, prompting short covering. However, T&D Holdings dragged on the Nikkei after it gave notice that it may sell new shares for funds to repay debt. In Hong Kong, the Hang Seng advanced 1.6%. Foxconn International was the only member of the 42 member index to log a loss. In mainland China, the Shanghai Composite finished just 0.3% higher.

 [BRIEFING.COM] S&P futures vs fair value: -7.10. Nasdaq futures vs fair value: -8.80.  Stock futures have slipped into the red following the release of the government's latest jobs report. According to the data, nonfarm payrolls for October fell 190,000, which is worse than the decline of 175,000 that had been widely forecast. Meanwhile, job losses for the previous month were upwardly revised to reflect nonfarm job losses of 219,000. The unemployment rate now stands at 10.2%, which is up from 9.8% and higher than the 9.9% that was widely forecast. It also marks the highest unemployment rate since 1983. Average weekly hourly hours were unchanged at 33.0, which is a bit below the 33.1 that had been forecast. Average hourly earnings increased 0.3% month-over-month, which is stronger than the 0.1% monthly increase that had been expected.

 [BRIEFING.COM] S&P futures vs fair value: +0.90. Nasdaq futures vs fair value: +3.00.  Stock futures are flat to modestly higher ahead of a potentially pivotal nonfarm payrolls report, which is due at the bottom of the hour. The consensus estimate for the October unemployment rate stands at 9.9%, which would be the highest level since 1982. Action in overseas markets is also a bit tepid ahead of the key report, and the U.S. dollar is flat against foreign currencies. There aren't many market-moving earnings reports out this morning, but AIG (AIG) posted a positive earnings surprise on improved and stabilized market performance. Despite this its shares are down more than 6% to $36.75 per share in premarket trade.

 [BRIEFING.COM] S&P futures vs fair value: -0.30. Nasdaq futures vs fair value: +1.00.  

[BRIEFING.COM] FTSE...5135.15...+9.50...+0.20%. DAX...5484.08...+3.20...0.00.

[BRIEFING.COM] Nikkei...9789.35...+71.90...+0.70%. Hang Seng...21829.72...+350.60...+1.60%.

[BRIEFING.COM] Broad-based buying on the back of a strong quarterly report from Cisco and a couple of pleasing economic reports helped stocks net robust gains ahead of tomorrow's potentially pivotal nonfarm payrolls report.

Cisco (CSCO 23.93, +0.64) won support for itself and other large-cap tech issues by posting better-than-expected top and bottom line results for its latest quarter and announcing that it has authorized an additional $10 billion to add to its share repurchase plan, which now stands at roughly $13 billion. Cisco went one step further and issued a solid outlook during its conference call.

Strength among large-cap tech issues helped hand the Nasdaq its best single-session percentage advance since July. Meanwhile, all 30 Dow components advanced and helped the blue chip index close above 10,000 for the first time in two weeks.

The positive tone among this session's participants was also helped by news that third quarter nonfarm productivity surged 9.5% in its preliminary report. That is considerably better than the 6.5% increase that had been widely expected. The surge marked the largest gain in productivity since 2003. It was fueled by the sharp increase in third quarter output and the considerable drop in hours worked. With job conditions still weak, unit labor costs dropped 5.2% in the third quarter. They were expected to fall 4.2%.

The latest initial jobless claims total came in 512,000, down 20,000 from the previous week and not as bad as the 522,000 initial claims that had been widely expected. Continuing claims came in at 5.75 million, which is in stride with what had been forecast and down from 5.82 million in the previous week. That decline, though, is primarily rooted in the trend that unemployed workers are losing their benefits, not finding jobs.

That trend has many market watchers looking ahead to the government's official nonfarm jobs report, which will be released before the opening bell Friday morning. The consensus forecast is that the October unemployment will hit 9.9%, which would be the highest level since 1983.

Despite concerns for that matter, all 10 major sectors finished the session with a gain. Only consumer staples failed to gain more than 1%. Disappointment over the pharmacy benefit management business at CVS Caremark (CVS 28.87, -7.28) overshadowed the company's better-than-expected earnings and additional share repurchase authorization, and caused the stock to drag on the consumer staples sector. Consumer staples, as a group, settled with a relatively modest gain of 0.6%.

Insurers also lagged as participants shunned Allstate (ALL 29.05, -0.57) and Prudential Financial (PRU 44.64, -1.92). Allstate missed the consensus earnings estimate, but Prudential actually posted a positive earnings surprise. Despite their weakness, financials still advanced 2.5%.

Only the consumer discretionary sector had a better gain. It advanced 2.6% in the face of mixed monthly same-store sales results from retailers.

Advancing Sectors: Consumer Discretionary (+2.6%), Financials (+2.5%), Industrials (+2.5%), Materials (+2.4%), Tech (+2.2%), Utilities (+1.7%), Health Care (+1.6%), Energy (+1.6%), Telecom (+1.2%), Consumer Staples (+0.6%)
Declining Sectors: (None)

..Nasdaq 100 +2.4%. ..S&P Midcap 400 +2.4%. ..Russell 2000 +3.2%.