(INDEXSP:.INX) rose 1.1% to 1805.09 on Friday on the back of a
better-than-expected November employment report.
The Bureau of Labor Statistics said that nonfarm payrolls rose
203,000, which was almost 10% ahead of the 185,000 consensus.
Additionally, manufacturing payrolls were ahead of expectations at
27,000, the unemployment rate fell to 7.0%, and, in a departure
from recent economic trends, the labor force participation ticked
up from last month.
But that wasn't the only data we saw today. October personal
spending was 0.3% vs. expectations of 0.2%, while personal income
dropped 0.1%, which was well below the +0.3 consensus.
Plus, the Fed's preferred inflation measure, the PCE deflator, was
in-line with expectations with a 0.7% increase. It was the lowest
reading since 2008, the second lowest seen in 30 years, and well
below the Fed's 2% target.
The initial reaction to this 8:30 a.m. EST data deluge was
negative, with S&P futures dropping eight points within three
minutes, presumably on fears of the Fed tapering its QE activities
in reaction to the strong numbers.
However, the market had fallen five straight days into the report,
and given the Fed's reluctance to provide any specific guidance on
timing for a taper, it's not clear that any one economic number
could lead the Fed to pull back.
The mood today was also helped by the better-than-expected
University of Michigan sentiment survey, which came in at 82.5,
much better than the 76.0 consensus.
In stock news, book retailer Barnes & Noble (
) dropped 12.0% to $14.43 on news of an accounting investigation by
the Securities and Exchange Commission.
Looking at sectors, we saw impressive action in homebuilders,
financials, and industrials, though all S&P groups finished in
the green. On the negative side, the action in high-beta tech was
mixed, with key momentum names like
) selling off.
) was also weak today, though the stock had rallied strongly in
recent days on bullish analyst notes and reports of an iPhone deal
with China Mobile.
Tomorrow's Financial Outlook
Monday will be a fairly quiet day news-wise. There are no major
economic reports scheduled, though the October wholesale inventory
and JOLTS job openings reports will be out at 10:00 a.m. EST.
There will be a few earnings reports on the calendar, with the more
notable names being
Casey's General Stores