Stocks gain in spite of jobs report
NEW YORK – A disappointing jobs report couldn’t stop the stock market from having a strong start to the new year.
Stocks zigzagged for much of Friday but closed higher as investors took in stride the Labor Department’s news that employers cut 85,000 jobs in December, far more than the 8,000 analysts expected. The disappointing numbers were offset by a pleasant surprise: November’s report was revised to show the first job gains in nearly two years.
The Dow Jones industrial average tacked on 11 points to end at a new 15-month high, while broader indicators logged bigger gains. All the major indexes posted advances for the week, a reassuring sign given that stocks often end the year higher after a strong start to January.
The December job losses were disconcerting as a rebound in employment is key to a sustained recovery in the economy. But the market likely focused on the fact that a pickup in the labor market often lags other improvements following a recession.
“I don’t think that anyone should expect a flip of a switch,” said Linda Duessel, equity market strategist at Federated Investors. “We were losing 600,000, 700,000 jobs a year ago and we are now toggling around zero. There is nothing disappointing about that.”
The climb for the week was a welcome sign for 2010. Of the last 36 times when the S&P 500 index carved gains in the first five days of January, it ended the year higher 31 times, or 86.1 percent of the time, according to the Stock Trader’s Almanac.
Next week, investors will get reports on retail sales and industrial production, and they’ll be looking for companies to report stronger sales and outlooks for the rest of this year. A handful of corporate earnings reports from the final quarter of 2009 will start to arrive. Aluminum producer Alcoa Inc. is scheduled to report its results after the closing bell on Monday and banker JPMorgan Chase & Co. reports on Friday.
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