Markets Surge on Jobs Data, Dow Posts Weekly Gain

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"This morning, it was all about the impressive jobs report that was released," observed Schaeffer's Senior Equity Analyst Joe Bell, CMT. "Nonfarm payrolls increased by 204,000, which easily surpassed economists' expectations for the labor statistic. Stocks initially sold off, but by midday, shares of most major indices were positive, and the overall reaction was upbeat." Meanwhile, the Dow Jones Industrial Average (DJI) recovered all of yesterday's losses, and finished the week in positive territory.

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

plus...
    Groupon Inc ( GRPN ) topped quarterly earnings expectations, consumer sentiment hit a two-year low, and Twitter Inc (NYSE: TWTR ) received a pair of skeptical analyst notes.

After a bit of choppy price action early this morning, the Dow Jones Industrial Average (DJI - 15,761.78) surged higher, and finished with an advance of 167.8 points, or 1.1% -- marking a record closing peak. For the week, the Dow gained 0.9%. JPMorgan Chase & Co. ( JPM ) led the 27 advancers with a rise of 4.5%, while The Home Depot, Inc.'s ( HD ) decline of 0.3% paced the three laggards.

The S&P 500 Index (SPX - 1,770.61) was parked in the green for most of the session, and finished 23.5 points, or 1.3%, higher. Meanwhile, the Nasdaq Composite (COMP - 3,919.23) added 61.9 points, or 1.6%. On a weekly basis, the SPX tacked on 0.5%, while the COMP edged down approximately 0.1%.

Elsewhere, the CBOE Volatility Index (VIX - 12.90) stumbled right out of the gate, and ended up shedding 1 point, or 7.3%, by the close. The "fear gauge" shaved off 2.9% for the week.

CLOSING SUMMARY - INDICES

CLOSING SUMMARY - NYSE AND NASDAQ

A Trader's Take :

"We finally saw some outperformance from small-caps and technology," Bell said. "These sectors have led the market for quite some time, and it was nice to see a strong showing from them after a few days of underperformance."

3 Things to Know About Today's Market :

  • The Labor Department said the U.S. created 204,000 new jobs in October, handily topping consensus projections for just 120,000 new positions. However, the unemployment rate edged up to 7.3%. (CNBC)
  • Groupon Inc ( GRPN ) reported a narrower third-quarter loss of $2.6 million -- roughly equivalent to breakeven on a per-share basis -- compared to a loss of $3 million in the year-ago period. Meanwhile, revenue climbed 5% to $595.1 million. For the fourth quarter, GRPN expects to either break even again, or earn a profit of 2 cents per share. (Reuters)
  • The Thomson Reuters/University of Michigan's consumer sentiment index showed a preliminary November reading of 72 -- unexpectedly declining from October's figure of 73.2, and marking the index's lowest level in almost two years. (Bloomberg)

5 Stocks We Were Watching Today :

  1. A well-received earnings report for Priceline.com Inc ( PCLN ) triggered a slew of bullish brokerage notes ahead of the opening bell.
  2. The latest Option Idea of the Week explains why MGIC Investment Corp. (MTG) could be poised for further near-term gains.
  3. Twitter Inc (TWTR) was slapped with some bearish analyst coverage today, despite yesterday's successful debut on Wall Street.
  4. Near-term put volume accelerated on Cisco Systems, Inc. (CSCO) , as one group of traders zeroed in on the December series of options.
  5. Bank of America Corp's (BAC) positive price action -- sparked by today's jobs data -- may have lured a bevy of call players to the options pits.

EARNINGS

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

STOCKS - NOTABLE CALL ACTIVITY

STOCKS - NOTABLE PUT ACTIVITY

Commodities :

Crude futures edged higher today, as this morning's strong jobs data lifted hopes for increased energy demand. By the time the dust settled, the December contract tacked on 40 cents, or 0.4%, to close at $94.60 per barrel. On a weekly basis, crude remained nearly flat.

Meanwhile, gold futures declined, as today's employment report bolstered tapering anxieties. December-dated gold fell $23.90, or 1.8%, to finish at $1,284.60 per ounce -- the lowest price for a most active contract since mid-October. For the week, the precious metal lost 2.2%.

SCHAEFFER'S MARKET POSTURE



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This article appears in: Investing , Options

Referenced Stocks: AAPL , GRPN , HD , JPM , PCLN

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