No Jobs? No Problem!

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Stocks shook off a weak NFP report today to make their way into the green.

At8:30 a.m. EST , the Bureau of Labor Statistics announced that just 74,000 jobs were created in December 2013, the lowest number seen since January 2011. The December print was a far cry from not only the 197,000 consensus, but from the low forecast of 100,000.

Private payrolls also missed by a big margin, coming in at just 87,000 vs. Wall Street's expectations for a 200,000 gain.

The unemployment rate was well below expectations at 6.7%, but that was the result of a significant shrinking of the labor force.

Economists were generally perplexed by the weakness, especially since Wednesday's ADP employment report was so strong. Unexpectedly cold weather likely played a role in slowing down hiring, and some jobs sectors -- like health care and accounting and bookkeeping services -- were surprisingly weak.


On the positive side, November 2013's NFP number was revised up to 241,000 from 203,000.

Immediately following the report, S&P 500 (INDEXSP:.INX) stock futures dropped 12 points. However, the index bottomed out by midday, and gradually crawled up throughout the day to finish up 0.2% at 1842.37.

But the real action was in Treasuries, as yields steadily declined throughout the day, bringing the 10-year down 10 bps to 2.86%, a level not seen since mid-December. That sharp drop drove a spike in interest-rate sensitive stock sectors like utilities and housing. Gold also performed well, with a 1.3% gain.

Elsewhere, shares of Intercept Pharmaceuticals ( ICPT ) rose an incredible 62% to $445.83 , just one day after it rose 281% on news of a successful trial for a liver-disease drug. Bank of America ( BAC ) helped drive the optimism as it increased its price target on Intercept to $872 from just $81.

Alcoa ( AA ) sold off 5.4% to $10.11 after the aluminum maker reported weaker-than-expected fourth-quarter earnings. The stock had risen 20% in the two months preceding the report, so expectations were high.

The retail sector was busy, with Sears Holdings ( SHLD ) taking a 13.8% hit following its disappointing sales update issued after the closeThursday , while Abercrombie & Fitch ( ANF ) shot up 12.0% on its increased guidance. Target (TGT) fell 1.1% after lowering fourth-quarter guidance and announcing that its recent security breach was larger than previously thought.

And finally, Indian IT firm Infosys (INFY) squeezed out a 6.0% rally on its better-than-expected third-quarter earnings report.

Monday's Financial Outlook

There are no major earnings and economic reports on the calendar forMonday . For now, investors will be parsing the NFP numbers as well as pondering the impact of the recent QE taper announcement.

Additionally, some investors may be feeling cautious from the weak start to the year, which can be a harbinger of dark times ahead.

In terms of news, we should see more companies adjusting fourth-quarter guidance, and based on recent history, the changes will likely be mostly negative.

And of course, things will pickon Tuesday with the December 2013 retail sales numbers, and earnings reports from megabanks JPMorgan (JPM) and Wells Fargo (WFC).

Twitter: @Minyanville



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



This article appears in: Investing , Stocks

Referenced Stocks: AA , ANF , BAC , ICPT , SHLD

Minyanville

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