Tech gains help stocks rebound

By Melinda Peer, TheStreet

Updated at 4:53 p.m. ET

Stocks rebounded in the final hour of trading as gains in tech shares helped the market recover from a disappointing jobs report.

The Dow Jones Industrial Average ($INDU) rose 20 points, or 0.2%, to close at 11,382. The S&P 500 ($INX) edged higher by 3 points, or 0.3%, to 1,225, and the Nasdaq ($COMPX) added 12 points, or 0.5%, to finish at 2,591.

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Stocks have gained for three straight days, lending a strong start to December. The Dow rose 2.6% over the week while the S&P 500 gained 3%.

The somewhat muted reaction of the markets to the adverse jobs reports on Friday took analysts by surprise.

American employers increased their payrolls by 39,000 in November, fewer than the 130,000 economists had projected and the 172,000 added in October, according to Briefing.com. The unemployment rate climbed to 9.8% -- the highest level since April -- from 9.6% in October.

Payrolls at companies rose by 50,000, compared with the 140,000 increase economists had estimated. In October, companies added 160,000 jobs.

A recent wave of positive economic news and better-than-expected​ ISM services and factory orders report may have been one reason why investors may have shrugged off the jobs report, according to market experts.

The weaker dollar, which has had a greater influence on stocks in recent months, may have been another reason for the surprise rally on Friday.

Speculation that the Fed might step up its quantitative easing program also aided sentiment. The stubbornly high unemployment rate was one of the main factors cited by the Federal Reserve in its decision to begin purchasing $600 billion of long-term Treasurys through the second quarter of 2011. The Fed has said it will regularly review the pace of its asset-purchase program against economic conditions to ensure that it achieves the central bank's desired goals.

"Bad news is good because that means the Fed will keep on spending," said Ron Courser, the president of Ron Courser & Associates. "All (Fed Chairman Ben) Bernanke is trying to do with (quantitative easing) is reflate the assets so that the market starts to feel better and people start to go out and buy more stuff, increasing demand and spurring employment."

The February gold contract gained $16.90, or 1.2%, to settle at $1,406.20, boosting gold stocks. Newmont Mining (NEM) ended up 3.1% at $62.36, while AngloGold Ashanti (AU), Barrick Gold (ABX) and Vista Gold (VGZ) were all up by more than 2%.

The weak U.S. dollar also helped commodity prices. The greenback traded lower against a basket of currencies, with the dollar index down by 1.4%. The January crude oil contract was up by $1.19, or 1.4%, to settle at $89.19 a barrel.

The basic-materials sector saw the session’s strongest gains as a weaker U.S. dollar increased the appeal of dollar-priced assets.

DuPont (DD), Alcoa (AA) and Bank of America (BAC) topped the Dow while Cisco (CSCO) and Exxon-Mobil (XOM) were its biggest laggards.

Sunoco (SUN) shares dropped 3.9% to $39.58 after it agreed to sell its Toledo, Ohio-based refinery to Toledo Refining Co. for $400 million. The transaction is expected to be completed in the first quarter.

Shares of Apollo Group (APOL) were up 2.9% to $36.38 on speculation that Secretary of Education Arne Duncan could soon meet with members to discuss recently proposed regulations on the for-profit education sector.

Shares of Big Lots (BIG) closed down 5.1% to $29.50 after the retailer reported a third-quarter profit that missed expectations by 1 cent and cut its full-year earnings forecast.

Chevron (CVX) is selling an 18% stake in an Indonesian deep-water gas field to Sinopec (SNP) for $680 million. Shares of Chevron gained 0.5% to $84.89, while Sinopec's stock fell by 1.6% at $94.46.

Walter Energy (WLT) has agreed to buy Canada's Western Coal for $3.3 billion. Walter Energy's stock rallied 4.7% to $110.52.

The Institute for Supply Management said its services index, a measure of nonmanufacturing activity, rose to 55 in November from October's reading of 54.3. The level outpaced the reading of 54.5 that economists had been anticipating, according to Briefing.com.

The Department of Commerce said factory orders slipped 0.9% in October after rising 2.1% in the previous month. Wall Street had projected a decline of 1.3%.

The House of Representatives approved a measure on Thursday to maintain the current tax rates for people making up to $250,000 but would allow higher taxes on people with larger incomes. The Senate is expected to reject the measure.   

The FTSE in London lost 0.4%, and the DAX in Frankfurt fell 0.1%. Hong Kong's Hang Seng lost 0.5%, while Japan's Nikkei gained 0.1%.

The benchmark 10-year Treasury note weakened 3/32, lifting the yield to 3.007%.

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