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After The Close - What was looking like a disappointing week for Wall Street ended on a very positive note. For the first time in several days, a good report on the U.S. economy was actually good news for stocks. In recent sessions, investors showed some concerns that an improving economy would push the Federal Reserve to begin tapering its bond buying, a move that is not typically greeted kindly by investors. However, today’s strong report on the labor market (more below) gave investors some confidence that the economy now may be  on good enough footing to withstand some reduction in monetary support from the Federal Reserve.

The major equity indexes, boosted by the favorable employment figures this morning, were off to the races at the opening bell, and never looked back. By the conclusion of trading, the Dow Jones Industrial, the NASDAQ, and the S&P 500 Index had added 199, 29, and 20 points, respectively. In the process, a five-session losing streak was ended and a good portion of the weekly losses were retraced. Overall, advancing issues far outpaced decliners on both the New York Stock Exchange and the NASDAQ, to the tune of about two and half-to-one on the Big Board.

As noted, the primary catalyst behind today’s notable response from the bulls was a strong report on the labor market. Specifically, the Labor Department reported that 203,000 new jobs were created last month and that the nation’s unemployment rate fell further than expected, dropping from 7.3% to 7.0% in November. More important, the latest report showed that job creation has averaged slightly more than 200,000 over the last four months, a level that economists feel is needed to make a considerable dent in the nation’s unemployment rate. The employment report was an exclamation point on a good week for the U.S. economy. Looking ahead to next week, the economic beat will be pretty quiet, with the only major reports coming late in the week on retail sales (Thursday) and producer prices (Friday).

From a sector perspective, there was much to like, with all of the major groups finishing comfortably in positive territory. One standout was the industrial sector, with stocks of manufacturing companies getting a boost from the aforementioned labor report, which showed that 27,000 manufacturing jobs were added last month, well above expectations. Meanwhile, the technology sector, relative to the gains booked by the other major groups, did not fare as well, with some weakness from the industry heavyweight Apple (AAPL) and a lackluster showing from the software makers and communications equipment stocks. The technology showing was also a big reason why the NASDAQ advance today was not as stout as those turned in by the Dow 30 or the broader S&P 500 Index.

There was also some notable earnings news from Corporate America, mostly from the retailing industry. Of note, shares of Big Lots (BIG) fell sharply after reporting lower-than-expected earnings. Conversely, shares of West-Coast lifestyle retailer Pacific Sunwear (PSUN) jumped on its latest quarterly results. These two reports were the big stories among a handful of retailing companies reporting October-period results today.   – William G. Ferguson

At the time of this article’s writing, the author did not have positions in any of the companies mentioned. 

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2:30 PM EST - After more than a week in which good news on the economy has been bad news for Wall Street, the market and the economic beat are now marching in order, as one would expect that they would.

Thus, after the Labor Department reported early this morning that the nation had added 203,000 new positions last month, or modestly more than the 180,000 generally forecast, the stock market, down modestly for five days in a row, took off on a bullish run.

In fact, equities climbed at the opening bell and have not really looked back at all since, gaining new momentum after lunch. Thus, as we enter the final 90 minutes, or so, of the concluding trading day of the week, we find that the Dow Jones Industrial Average is up 187 points, and is now trading at just above 16,000. 

Also moving higher on a day that is seeing almost three times as many stocks moving up as heading down on the Big Board and a positive plurality of better than two-to-one on the NASDAQ, are the Standard and Poor's 500 Index (up 20 points, to above 1,800 again) and the NASDAQ, which is climbing 32 points.

What is behind this latest rally, which comes in spite of the now greater possibility that the Federal Reserve will soon start to slow its rate of bond purchases? In some sense, the report may reflect confidence that even if the Fed does opt to taper its bond buying as early as later this month, the economy is now strong enough to handle such action easily. 

Whatever the rationale, the good news for those long equities is that the market's mini-slump, which commenced late last week, may be over for now. Meanwhile, we would watch the closing 90 minutes of the trading session to see if the gains can be sustained for some clue as to what the market may be telling us for Monday morning. Stay tuned.   - Harvey S. Katz

At the time of this article's writing, the author did not have positions in any of the companies mentioned.    

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12:30 PM EST - The U.S. stock market is putting in a good showing today, after several days of weakness. At past noon in New York, the Dow Jones Industrial Average is up 150 points; the broader S&P 500 Index is ahead 17 points; and the technology-heavy NASDAQ, which lagged a bit this morning, is now up 31 points. Market breadth suggests an improved tone, as advancing issues are well ahead of decliners on the NYSE. Meanwhile, all of the market sectors are making progress, with notable advances in the basic materials and industrial issues. The financials are also quite strong. While there is no weakness in the market today, some of the consumer names are lagging the other sectors a bit.

Technically, the market seems to reversing course, after pulling back for several consecutive sessions. Today’s move up currently puts the S&P 500 Index just back above the widely-watched 1,800 level. Hopefully for the bulls, this level will hold, and buyers will look to extend today’s move over the next few days. Sentiment seems to be improving, as the VIX is lower by about 8%, to under 14 today.

Meantime, traders received a key piece of economic news this morning. As might have been inferred from the releases put out earlier this week, the November employment figures were quite strong. Specifically, nonfarm payrolls rose by 203,000 for the month, which was better than had been expected. Further, the headline unemployment rate dropped to 7.0%, from the 7.3% reading registered in October.  The rally today comes as a relief, since traders have had a mixed reacted to some positive news lately. While a stronger economy may have some on Wall Street concerned about a shift in Fed policy, today’s numbers may have been simply too encouraging to be squashed by such fears.

Elsewhere, the consumer seems to be doing better, as well. The University of Michigan’s Consumer Sentiment survey came in with a reading of 82.5 for December, which was also ahead of expectations. Consumer figures are quite important, as sentiment and retail spending truly reflect the mood of the average citizen, and are a good measure of the economy’s health.

In the corporate area, a few big retailers put out figures today. American Eagle Outfitters (AEO) stock is off, as investors seem less than impressed with the company’s outlook. Further, Big Lots (BIG) shares are losing ground on similar concerns. Adam Rosner

At the time of this article’s writing, the author did not have positions in any of the companies mentioned.

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Stocks to Watch from The SurveyOctober-quarter earnings reports, many from retailers with fiscal years that end in January, continue to keep investors busy. One of the biggest movers ahead of the bell is Ulta Salon (ULTA). Indeed, shares of the cosmetics retailer are plunging in pre-market trading, as October-period results missed the mark and guidance was weaker than expected. Other stocks indicating notably lower openings on earnings news include Big Lots (BIG), which operates a chain of closeout stores, teen apparel and accessories retailer American Eagle Outfitters (AEO), discounter Five Below (FIVE), Zumiez (ZUMZ), a seller of action-sports related clothing and equipment, and contact lenses manufacturer The Cooper Companies (COO). 

It was not all bad news, however, and shares of West-Coast lifestyle retailer Pacific Sunwear (PSUN) and wireless networking company Finisar Corp. (FNSR) are moving higher ahead of the bell, with PSUN showing considerable strength. The stock of Sears Holdings (SHLD) is also indicating a stronger opening this morning, after the department store operator announced plans to spin off its Land’s End clothing business. – Matthew E. Spencer

At the time of this article’s writing, the author did not have positions in any of the companies mentioned.

Before The Bell - Once again, it is all about the Fed, as nervous investors scrutinize each and every piece of economic data being issued by private research groups and the government for some suggestion as to whether or not the central bank is more or less likely to start to taper its bond-buying activities when it next meets on December 17th and 18th.

In general, the recent succession of reports, including a number of key issuances that had been delayed for a time by the partial government shutdown, has been better than generally forecast. Included in this group have been releases on the gross domestic product, where yesterday brought a surprisingly strong upward revision. Specifically, the report showed that growth had surged to 3.6% in the third quarter, up from an initially estimated gain of 2.8%, which had been issued last month. Add in some better-than-expected metrics on manufacturing activity, auto sales, and the trade gap, and the consensus seems to be moving in the direction of a more restrictive bias on the part of the Federal Reserve. The question is just when this less-generous Fed policy will start to evolve.

Of course, we have been down that road before, and we seem to be going over that same ground each time the bank convenes, which is about every six weeks. Once more, we are faced with that possibility, which we believe has only about a 50% chance, or less, of being realized later this month. And even if the Fed does become nominally less accommodative, which is the most we think might happen, the impact would not be material, but largely symbolic.

Thus, it is a little head scratching as to just why Wall Street overreacts, which is what it may, indeed, be doing now, as suggested by the fact that stocks have generally tracked lower for five sessions in a row, the latest being yesterday, when the aforementioned GDP advance sent the bulls scampering a bit. That is especially so since much of the quarter's accelerating GDP gain was due to a surge in inventories. Those stockpiles will now, presumably, need to be worked off, and that running down of such stockpiles will hamper growth in the current quarter, which may come in at 2%, or even less.

Meanwhile, after a series of half-hearted attempts to pare the deficit, stocks concluded the session mostly in the red, led in this regard by the Dow Jones Industrial Average (which lost 68 points) and the Standard and Poor's 500 Index (which closed eight points in the red). The losses, though, were less pronounced elsewhere, with the small-cap Russell 2000 Index actually posting a modest gain on the day, as did the Standard and Poor's 400 Mid-Cap Composite. As for groups, there was some selective buying in the tech sector, with chipmaker Intel (INTC - Free Intel Stock Report) bouncing back from recent softness, while Boeing (BA - Free Boeing Stock Report), a stalwart performer thus far this year added to its year-to-date gains with better than a one-point advance. However, the gold stocks fell back, as the precious metals again headed lower following a modest technical bounce on Wednesday. It seems that the stronger growth, which is increasing the odds that the Fed will act, is not sitting well with gold investors.

Then, there is another Fed-related concern, namely what this morning's key report on November payrolls and the jobless rate would imply for monetary policy. Here, expectations had been that the nation had created some 180,000 jobs in the last month, while the unemployment rate was expected to have eased from 7.3% to 7.2%. Data issued moments ago, however, showed that the nation had added 203,000 positions in November, while joblessness fell to 7.0%, as forecast, the lowest since November 2008. The upbeat news, meantime, initially blunted the early advance in the equity futures. However,  soon after the futures rebounded and the stock market now seems poised to start the day materially to the upside, in spite of the stronger payrolls figures, which, on the surface, would seem to strengthen the case for a near-term tapering. Of course, the better jobs data also strengthens the case for earnings, and that is always a market mover. Finally, the yield on the 10-year Treasury note has climbed to 2.90% on this data, while the 30-year Treasury is now yielding 3.93%.   - Harvey S. Katz

At the time of this article's writing, the author did not have positions in any of the companies mentioned.