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Friday sees modest gains despite disappointing jobs report, leaving stocks higher on the week. The Dow ($INDU) gained 17.46 to a level of 10,023.42. The S&P 500 ($SPX) added 2.67 points to 1,069.30. The Nasdaq ($COMPQ) tacked on 7.12 points to 2,112.44. Volume was light on the session with the NYSE trading 1.08 billion shares and the Naz turning over 1.86 billion shares. Market breadth was mixed with the Big Board positive by a 15-to-14 margin, but the Naz negative by a 13-to-14 margin.

Nonfarm payrolls fell by 190,000 in October, but fell short of estimates for a decline of 175,000. However, September was revised to a decline of 219,000 from the initial drop of 263,000. At least this data shows improvement, though not at the level economists were looking for. The biggest disappointment in the report was the spike in the unemployment rate. This rate rose to 10.2 percent from 9.8 percent in September. Estimates were for a rise to 9.9 percent and October's reading is the highest in more than 25 years. Compared with the year ago period, payrolls are down 4.0 percent, which is an improvement from the decline of 4.2 percent seen in September.

Several stocks saw solid gains Friday on analyst upgrades including General Electric (GE), Travelers (TRV), Amazon.com (AMZN) and Macy's (M). Bernstein raised its rating on GE and AMZN to "Outperform" from "Market Perform", which provided gains of 6.31 percent and 4.63 percent for these two stocks. Bernstein expects GE to continue divesting different businesses, which could generate up to $30 billion in revenue. GE shares close at $15.33 with a 52-week range from $5.73 to $19.75.

Macy's shares rallied 6.49 percent Friday to $19.19 after JPMorgan upgraded the stock to "Overweight" from "Neutral." Macy's same-store sales results for October saw a decline of 0.8 percent, but JPMorgan feels discretionary spending is improving and department stores will benefit. Overall, the Retail HOLDRs (RTH) gained 1.22 percent today to $92.58.

Shares of TRV reached a new 52-week high Friday when the stock hit $52.22 intraday before closing with a gain of 2.49 percent to $51.90. Goldman Sachs upgraded the insurer to "Buy" from "Neutral." XL Capital (XL) was also upgraded, sending its shares up 3.8 percent to $17.22. Insurer AIG (AIG) wasn't as fortunate Friday with its shares falling 9.67 percent to $35.48. The company easily surpassed earnings expectations, but traders are still concerned about AIG's underlying business.

Overall, the bulls have to be pleased with the results this past week. The major market indices all gained more than three percent. This gains pushed the fear indices down sharply with the CBOE Market Volatility Index ($VIX) falling 21.24 percent to 24.17.

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

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