Encouraging Jobs Data Sparks a Market Rally


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"The market's slump is over," observed Schaeffer's Senior Technical Strategist Ryan Detrick, CMT. "After five straight down days for the Dow Jones Industrial Average (DJI) and S&P 500 Index (SPX) , the bulls came back swinging today. Sparking the buying was the stronger-than-expected jobs data. In the end, the SPX's weekly winning streak ended at eight weeks, but it was a very minor loss. All in all, early December typically doesn't do much, as it is the last two weeks that really move higher. So far, this year could be fitting that template pretty nicely."

Continue reading for more on today's market, including :

    The U.S. added more jobs than expected in November, consumer sentiment hit a multi-month high, and LinkedIn Corp ( LNKD ) received some bullish analyst attention.

The Dow Jones Industrial Average (DJI - 16,020.20) spiked at the opening bell and kept trekking north, ending the session 198.7 points, or 1.3%, higher -- and reclaiming the 16,000 level. However, the index dropped 0.4% for the week. All 30 blue chips advanced, with Intel Corporation's ( INTC ) 2.3% win leading the way.

The S&P 500 Index (SPX - 1,805.09) charted a similar path to the Dow, and added 20.1 points, or 1.1%, on the day. Meanwhile, the Nasdaq Composite (COMP - 4,062.52) finished the session up 29.4 points, or 0.7%, after tagging a fresh 13-year intraday high. On a weekly basis, the SPX was fractionally lower, while the COMP edged roughly 0.1% higher.

Elsewhere, the CBOE Volatility Index (VIX - 13.79) faltered out of the gate, and lost 1.3 points, or 8.6%, for the day. However, the "fear gauge" closed 0.7% higher for the week.



A Trader's Take :

"This is where things get complicated," said Detrick. "Everyone seems to think that stronger data is bad because it means the Fed will taper, and this of course will bring with it a huge drop in stocks. Personally, I'm not in that camp. The last time I saw everyone so certain of something was a year ago, when the fiscal cliff was going to wreak havoc on 2013. Well, we see how that turned out. Could the masses once again be worrying themselves for no reason? To me, I'd rather start to see some tapering and let the economy stand on its own footing."

3 Things to Know About Today's Market :

  • The Labor Department said the U.S. created 203,000 new jobs in November , which easily exceeded consensus estimates. Meanwhile, the unemployment rate dropped to 7.0% from 7.3%, marking its lowest level since November 2008. (MarketWatch)
  • In an interview with CNBC, Philadelphia Fed President Charles Plosser said now may be the time to start scaling back the central bank's asset-buying program , particularly in light of today's jobs report. "It would be wise if we began to get rid of this program," he commented. "I don't think it's doing very much good for us. It has a lot of unintended consequences and risk for the economy down the road." (CNBC)
  • The preliminary December reading of the Thomson Reuters/University of Michigan consumer sentiment index arrived at 82.5 -- up from a reading of 75.1 in November, and denoting the index's highest point since July. Economists, on average, were expecting a smaller increase. (Bloomberg Businessweek)

5 Stocks We Were Watching Today :

  1. Uptrending LinkedIn Corp ( LNKD ) scored an upgrade and a price-target hike ahead of the opening bell this morning.
  2. The latest edition of Option Idea of the Week highlights why Chipotle Mexican Grill, Inc. ( CMG ) could be poised for extended gains.
  3. One Tesla Motors Inc ( TSLA ) speculator utilized December options to construct a call spread on the popular auto concern.
  4. Front-month option bulls targeted Groupon Inc (GRPN) , and wagered on the stock to hit double-digit territory again.
  5. General Motors Company (GM) received an upbeat brokerage note, but that didn't keep bearish bettors from buying near-term puts.


For a look at today's options movers and commodities activity, head to page 2.



Commodities :

Crude futures edged higher today, as encouraging economic data strengthened energy demand projections yet again. By the time the dust settled, the January contract added 27 cents, or 0.3%, to end at $97.65 per barrel. For the week, oil gained 5.3% -- the best weekly advance since early July.

Meanwhile, gold futures were pressured lower by this morning's reports, with February-dated gold shaving off $2.90, or 0.2%, to finish at $1,229.00 per ounce. On a weekly basis, the precious metal lost 1.7%.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

All Rights Reserved. Unauthorized reproduction of any SIR publication is strictly prohibited.

This article appears in: Investing Options
Referenced Stocks: BBRY , CMG , INTC , LNKD , TSLA

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