MARKET SNAPSHOT: Stocks End Higher, Lifted By GE, Consumer Shares
By Dow Jones
Stocks snapped a two-week losing streak Friday as a surge in General
Electric nudged the Dow Jones Industrial Average back above 10,000, marking its
first weekly close above that level since the early days of the credit crisis.
Through most of the session, the market was stuck in a tight range between
positive and negative territory but ended with a narrow gain. The Dow (DJI) rose
17.46 points, or 0.2%, to 10,023.42, up 3.2% on the week
The Nasdaq Composite Index (RIXF) was up 0.3% to 2112.44, up 3.3% on the week.
The S&P 500 Index (SPX) rose 0.3% to 1069.30, up 3.2% on the week.
Other markets showed a push into less-risky assets. U.S. gold futures topped $
1,100 an ounce for the first time, settling at $1,095.10. Treasury prices were
higher.
Energy stocks lagged the broader market, hurt by a more-than-$2-a-barrel drop
in oil prices as commodity traders bet on weak fuel demand following the jobs
report. Oil futures settled down $2.19 to $77.43 a barrel in New York.
Consumer stocks benefited from the prospect that lower fuel prices might give
Americans' greater leeway to spend on other items. Starbucks (SBUX) was
particularly strong, rising 7.2% after the coffee retailer raised its earnings
outlook for next year and reported a $150 million fiscal fourth-quarter profit.
Oil majors Exxon Mobil (XOM) and Chevron (CVX) were among the declining Dow
components.
Sunoco (SUN), which reported a drop in earnings and poor margins on Thursday,
was the biggest decliner among energy companies on the Standard & Poor's 500
Index. (SPX). Tesoro (TSO) and Hess (HES), other big energy refiners, were also
losers.
Declines in the Dow and in the broader market were led by financials and
energy firms, including J.P. Morgan Chase (JPM).
For energy firms, a more than $2 a barrel drop in oil prices weighed on the
sector. Much like the stock market, oil prices were weighed down by the October
jobs report.
Almost half the Dow's point gain on Friday could be attributed to a 6.2% surge
in component GE (GE) after analysts at both Sanford C. Bernstein and Oppenheimer
upgraded the conglomerate to an "outperform" rating.
The GE-owned business television network CNBC reported that its parent is near
a deal to sell its 80% stake in NBC Universal to Comcast. Comcast shares were up
2.8%.
Though the Dow has closed above 10,000 several times this fall, it hasn't
finished a full week of trading above that level since the period ending Oct. 3,
2009. In particular, the blue-chip measure has been plagued in recent weeks by a
lack of conviction that has often led to profit taking around the 10,000 level,
fueled by investors' fears about the pace of the U.S. economic recovery.
Though those jitters didn't carry the day on Friday, they were kept simmering
by disappointing readings of consumer credit and employment.
The Labor Department reported a bigger decline than expected in U.S. payrolls
for October and a jump in the unemployment rate to 10.2%, its highest level
since 1983. Though the pace of month-to-month job losses is slowing,
unemployment rolls have swelled by 8.2 million people since the start of the
recession in December 2007.
On Wall Street, market players grumbled about the unemployment news but didn't
see it as cause for all-out panic, with many investors growing accustomed to
such bad news after 22 straight months of job losses.
Also, the pace of month-to-month losses is now slowing, which bulls take as a
sign that a full-blown turnaround in the job market is on the way, perhaps as
early as the first quarter of next year.
However, it will take any renewed growth spurt a long time to make up for the
damage that's already been done, with unemployment rolls up by 8.2 million
people since the start of the recession in December 2007.
Such sobering long-term measures have made some investors jittery lately about
the prospects for consumer spending and corporate profits.
"What I don't like about the numbers today is that we're seeing more people
out of work for longer," said portfolio manager Kim Caughey, of Fort Pitt
Capital Group in Pittsburgh. "We've seen some employment in the [weekly filings
of new jobless] claims numbers, but when we get these payroll reports, we're not
seeing the people who were already on the rolls come off."
Notably, September's nonfarm payrolls report was revised to a decline of 219,
000 jobs from the previously reported 263,000-job decline.
Strategist Steve Charest, of Divine Capital Markets in New York, characterized
the jobs report as offering neither big disappointments nor sufficient reason
for him to abandon his view that the market is due for a correction over the
next few months, with major indexes apt to shed perhaps half their gains from
the March lows before resuming a trend higher.
"In a recession driven by the sort of problems we've seen in the financial
sector, you'd expect the unemployment rate to top out around 11%," said Charest.
"I try to keep in mind that figure was hit in the early 80's, and aside from
high rates breaking the back of inflation, things then were pretty good compared
to what we've had recently."
(END) Dow Jones Newswires
11-06-091640ET
Copyright (c) 2009 Dow Jones & Company, Inc.
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