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Stocks May See Early Strength On Upbeat Jobs Data - U.S. Commentary


With traders reacting positively to the monthly jobs report, stocks are likely to move to the upside in early trading on Friday. The major index futures are currently pointing to a higher open for the markets, with the Dow futures up by 61 points.

The futures showed a substantial upward move following the release of a report from the Labor Department showing stronger than expected job growth in the month of November.

The Labor Department said non-farm payroll employment increased by 146,000 jobs in November following a downwardly revised increase of 138,000 jobs in October.

Economists had expected employment to increase by about 85,000 jobs compared to the addition of 171,000 jobs originally reported for the previous month.

The report also showed that the unemployment rate dropped to 7.7 percent in November from 7.9 percent in October. The drop surprised economists, who had expected the rate to edge up to 8.0 percent.

The Labor Department indicated that Hurricane Sandy did not substantively impact the national employment and unemployment estimates for November.

Peter Boockvar, managing director at Miller Tabak, said, "It's hard to believe that the awful Hurricane on the dense area of the tri-state area didn't have much of an impact on total hiring but most analysts thought it did and thus the bar was pretty low going into the report. The markets response higher is thus obvious."

While the data has generated some positive sentiment, traders are likely to keep an eye on the fiscal cliff negotiations in Washington.

Not long after the open, Reuters and the University of Michigan are due to release their preliminary report on consumer sentiment in the month of December. Economists expect the consumer sentiment index to edge up to 83.0 from 82.7 in November.

Stocks moved moderately higher over the course of the trading day on Thursday, although buying interest remained relatively subdued. Traders seemed somewhat reluctant to make any significant moves ahead of the monthly jobs report.

The major averages finished the day firmly in positive territory after ending Wednesday's trading mixed. The Dow rose 39.55 points or 0.3 percent to 13,074.04, the Nasdaq advanced 15.57 or 0.5 percent to 2,989.27 and the S&P 500 climbed 4.66 points or 0.3 percent at 1,413.94.

In overseas trading, stock markets across the Asia-Pacific region turned in another mixed performance. While Australia's All Ordinaries Index advanced by 0.9 percent, Japan's Nikkei 225 Index and Hong Kong's Hang Seng Index edged down by 0.2 percent and 0.3 percent, respectively.

Meanwhile, the major European markets have all moved to the upside on the day. The German DAX Index has inched up by 0.1 percent, while the French CAC 40 Index and the U.K.'s FTSE 100 Index are both up by 0.3 percent.

In commodities trading, crude oil futures are climbing $0.47 to $86.73 a barrel after tumbling $1.62 to $86.26 a barrel on Thursday. Meanwhile, gold futures are sliding $15 to $1,686.80 an ounce. In the previous session, gold rose $8 to $1,701.80 an ounce.

On the currency front, the U.S. dollar is trading at 82.71 yen compared to the 82.40 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.2891 compared to yesterday's $1.2970.

by RTTNews Staff Writer

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