Stocks up despite weak jobs report

NEW YORK (CNNMoney)

The Dow, S&P 500 and Nasdaq were all up in early trading, as was CNNMoney's new Tech 30 index.

The economy added only 74,000 jobs in December, far below the 193,000 that economists surveyed by CNNMoney had forecast. The unemployment rate last month fell to 6.7% from 7%, the Labor Department said.

The fact that stocks didn't take a nosedive despite an anemic jobs report may sound counter-intuitive. But a weak jobs number may mean the Federal Reserve will not rush to pull back on, or taper, its massive stimulus program, which has been big driver of the bull market.

The Fed announced last month that it will cut the size of its bond buying program since data showed evidence of an improving economy.

Related: 'I just want a job'

And while the monthly jobs report is often considered the best metric for gauging the health of the economy, some analysts were downplaying it.

"Stocks are shrugging off any fundamental economic impact from a disappointing number for just one month," said FTN Financial's Jim Vogel, adding that other recent economic data has been positive.

The economy is still improving and one unemployment report doesn't change that, according to David Lutz of Stifel Nicolaus,

He believes traders are looking at the jobs number and feeling comfortable that the Fed won't increase the size of its taper anytime soon. The Fed is now buying $75 billion a month in bonds, down from $85 billion previously. There had been expectations that the Fed would keep cutting the size of its bond purchases by $10 billion or so at its next few meetings. That is no longer certain.

And yields on the 10-year Treasury note fell in early trading as well as investors bought more bonds. (Rates and prices move in opposite directions.) That's another sign the market is betting that the Fed will act more cautiously.

"It's a total taper play," he said of the market's reaction.

Related: Fear & Greed Index still shows greed

What's moving: Target (TGT, Fortune 500)shares were under pressure after the retailer said 70 million individuals had information stolen in the recent data breach of credit and debit cards.

Alcoa (AA, Fortune 500) shares sank, one day after the aluminum producer reported quarterly earnings that missed estimates.

Sears (SHLD, Fortune 500) shares plunged 13% after the retailer reported a sharp drop in same-store sales during the holiday season and issued a weaker-than-expected forecast.

Abercrombie & Fitch (ANF) shares surged after the clothing retailer raised its earnings guidance for the year.

European markets were up in afternoon trading, while Asian markets closed with mixed results.

--CNNMoney's Annalyn Kurtz contributed

First Published: January 10, 2014: 9:50 AM ET

Anda sedang membaca artikel tentang

Stocks up despite weak jobs report

Dengan url

http://kasiatbuatsehat.blogspot.com/2014/01/stocks-up-despite-weak-jobs-report.html

Kasiat Buah