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Closing Wrap-Up, December 3

By Jody Osborne, Optionetics.com | Fri December 3, 2010 1:30PM PT

Bulls battle back Friday to keep winning streak alive despite jobs data. The Dow (DJI) added 19.68 points to close the session at 11,382.09. The S&P 500 (SPX) tacked on 3.18 points to 1,224.71 with the Nasdaq (COMP) rising 12.11 points to 2,591.46. Volume was moderate on the session with the NYSE trading 1.12 billion shares and the Naz turning over 2.04 billion shares. Market breadth was positive by a 19-to-11 and 16-to-10 margin on the Big Board and Naz respectively.

The talk all session was about the employment situation, following a subpar release this morning. For November, nonfarm payrolls rose by just 39,000, well below estimates for a gain of 168,000. At least October’s gains of 151,000 were revised higher to 172,000, but this about all the good news found in the data. The unemployment rate rose 2-tenths to 9.8 percent, a tenth more than anticipated and the average workweek was flat at 34.3 hours. Heading into the payrolls report, secondary releases pointed to strength, but the gain of just 50,000 private payrolls was disappointing to say the least. 

Traders initially pushed stocks lower following the report before the bell, but by the close, hopes of further stimulus left the major market indices slightly higher. After testing support to end November at the 11,000 level, the Dow has gained 3.4 percent the past three sessions. Friday’s strength could also have been a result of the dollar falling against other currencies. 

Interestingly, despite the bad news on the jobs market, the CBOE Market Volatility Index (VIX), which is a measure of fear, actually fell to 17.9, which is a level of support for the fear index. The Nasdaq Volatility Index (VXN) saw a similar decline, closing at 19.75 from 21.42 on Thursday.

Gold prices saw strong gains Friday with the commodity moving above $1,405 an ounce. This benefited mining stocks with Barrick Gold (ABX) up 1.33 percent and Gold Fields (GFI) rising 4.32 percent. The SPDR Gold Trust (GLD) rose two percent to $138.07, which is a new closing high for security. 

For the week, all three major market indices saw gains of at least 2.25 percent. Now we will have to see if euro debt concerns and the hostilities in Korea that hurt stocks to start the week will return or if the bulls have regained control of the stock market. 

Jody Osborne
Senior Writer & Options Strategist
Optionetics.com ~ Your Options Education Site

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Recent articles by Jody Osborne, Optionetics.com

December 03, 2010  -  Economic Watchdog, Dec 3
December 03, 2010  -  Morning Watch, December 3
December 02, 2010  -  Economic Watchdog, Dec 2
December 02, 2010  -  Closing Wrap-Up, December 2
December 02, 2010  -  Morning Watch, December 2


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