Despite Weak Jobs Report, Stocks Hit Higher Highs

Overnight, market activity was very muted as the market waited for the September non-farm payrolls report. The report was originally scheduled for October 4, but had been delayed due to the government shutdown. The report showed net non-farm payroll growth of 148,000 in September. Economists had estimated a gain of 180,000 in the month. July's payrolls were revised down by 15,000 while August's were revised up by 24,000.

The S&P 500 (INDEXSP:.INX) broke to new highs on the payroll data. The gains in equities were linked to feelings that the Federal Reserve would have to keep interest rates lower for longer and maintain its pace of asset purchases in its upcoming meetings. Materials and interest-rate sensitive utility-sector stocks were the best performers of the day. The dollar was down 0.6%, buoying gains in raw materials and precious metals, positively attributing to the gains in these sectors.

The 10-year Treasury yield fell nine basis points to 2.51% as slower growth expectations were priced in. Crude oil continued its decline after breaking below $100 for the first time since July yesterday, falling 1.6%.

Home prices in China's four largest cities rose by the fastest rate in more than two and a half years in September. Prices rose by 17% for Shenzhen, Guangzhou, Beijing, and Shanghai from a year ago. By comparison, in August, US home prices rose by 12.39% according to S&P/Case Shiller indices. Chinese equity indices were actually weaker due to speculation that the government would enforce tighter real estate regulations.

Before the market open, Lockheed Martin ( LMT ) beat earnings solidly and guided. Conversely, fellow military contractor United Technologies ( UTX ) missed earnings after cutting its revenue forecast.

Apple ( AAPL ) released a new model of its iPad and iPad mini at an event this afternoon. It also announced that it would no longer charge for operation system upgrades on its Mac models.

Netflix ( NFLX ) fell 17.25% during the day's trading after beating earnings strongly last night. On the conference call, CEO Reed Hastings mentioned that the company's solid reports were being unduly compounded by momentum investors.

Tomorrow's Financial Outlook

Tomorrow morning the US will release September import and export prices. Prices are expected to fall by 1% from a year ago. In addition, the FHFA will release its August home price index. Home prices are forecast to rise 0.8% during the month.

The Bank of Canada will make its monthly monetary policy decision in the late morning. In addition, the Bank of England will release the minutes from its October meeting. Lastly, Australia will release its September consumer price indices, and the eurozone will report its advance estimate of consumer confidence from October.

Thirty-nine major US companies will report earnings tomorrow. Notable reports include Caterpillar ( CAT ), Boeing (BA), AT&T (T), E*Trade Financial (ETFC), F5 Networks (FFIV), and Fusion-io (FIO).

Twitter: @Minyanville

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

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

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