Dow off 23 on jobs disappointment

But stocks come back from a midday sell-off. December payrolls increased by 103,000 -- less than expected. Gold falls for the fourth day in a row. The dollar is up against the euro.

By Charley Blaine Jan 7, 2011 12:43PM
Charley BlaineUpdated: 5:21 p.m. ET

For a brief moment today, stocks looked liked they were ready to swoon badly, thanks to a jobs report that disappointed and a Massachusetts court ruling on foreclosures that went against banks.

The Dow Jones industrials ($INDU)  were off nearly 100 points. The Standard  Poor's 500 Index ($INX) was off 12 points and pushing toward 1,260, a major support level. And suddenly the market held and started to rise.
The major averages didn't completely recover their losses, but the rebound was strong enough to bring the Dow back up to 11,675, a decline of just 23 points. The S&P 500 was off just 2 points to 1,272, and the Nasdaq Composite Index ($COMPX) finished off 7 points to 2,703.

Best of all, the averages ended the first five trading days of 2011 with gains. And if you believe that the first five days of the year function as an early warning signal for the year, 2011 could be a winner.

Next week marks the start of the fourth-quarter earnings season. Alcoa's (AA) report, due after Monday's close, is the unofficial start of the season.

Markets for the week



1/7/2011

12/31/2010

% chg.

YTD chg.
Dow industrials

11,674.76

11,577.51

0.84%

0.8%
S&P 500

1,271.50

1,257.64

1.1%

1.1%
Nasdaq 

2,703.17

2,652.87

1.9%

1.9%
Russell 2000

787.83

783.65

0.5%

0.5%
Crude oil 

$88.03

$91.38

-3.7%

-3.7%
(per barrel)











U.S. Dollar Index 

81.32

79.29

2.6%

2.6%
10-yr. Treasury

3.33%

3.30%

0.7%

0.7%
Gold

$1,368.90

$1,421.40

-3.7%

-3.7%
(per troy ounce)












There is job growth -- but not enough
The market did struggle all day after the Labor Department said job creation in December was much less than expected.

Most economists were hoping for gains of 150,000 jobs or more. Instead, the Labor Department said jobs grew by 103,000. The U.S. unemployment rate fell to 9.4%.  But that may not be good news because it reflects a work force decline of 260,000.  In other words, people stopped looking for work.

Federal Reserve Chairman Ben Bernanke said it may take four or five years for the job market to recover from the effects of the 2007-09 recession,. But the economy will be "moderately stronger" in 2011 than in 2010, he told the Senate Budget Committee today.

While the December gains were less than expected, the economy created 384,000 new jobs in the last quarter of 2010, up from a decline of 269,000 a year earlier and a loss of 1.96 million jobs in the last quarter of 2008.

Moreover, nonfarm payrolls did grow by 1.1 million in 2010, compared with declines of 4.74 million in 2009 and 3.62 million jobs in 2008.

"The economy is still working through the overhang left over from the recession," Dan Greenhaus, chief economist at Miller Tabak in New York, told The New York Times.

The disappointment in today's report stems from Wednesday's ADP National Employment Report, which projected a 297,000-job increase in December. That estimate was nearly three times larger than expected and forced many economists to boost their estimates for today's report.

The reason for the divergence may lie in how ADP counts payroll employment, especially at the end of the year when tricky weather and temporary holiday jobs can distort numbers.

Bernanke offered a somber view of matters at the Senate hearing. The job market has "improved only modestly at best," he said, and "considerable time will likely be required before the unemployment rate has returned to a more normal level."

Commodity sell-off continues
The market's fall set off related selling in commodities.

Crude oil settled down 35 cents to $88.03 a barrel. Gold settled off $2.80 to $1,368.90 an ounce after falling to as low as $1,350.50. It was gold's fourth loss in a row.

Crude and gold both fell about 3.7% on the week, part of a commodity sell-off. Silver took one of the biggest beatings, falling 7.3% on the week.

Interest rates were lower, with the 10-year Treasury yield falling to 3.328% from 3.419% on Thursday.

The dollar was higher against the yen and the Chinese yuan. The euro fell below $1.30. The U.S. Dollar Index, which measures the greenback against a basket of currencies, was up 22.8 cents to $81.32. The index was up 2.6% on the week.

Energy prices -- New York close
 

Fri.

Thur.

Month chg.

YTD chg.
Crude oil 

$88.03

$88.38

-3.67%

-3.67%
(per barrel)











Heating oil

$2.4863

$2.5112

-2.26%

-2.26%
(per gallon)











Natural gas 

$4.4220

$4.4340

0.39%

0.39%
(per mil. BTU)











Unleaded gasoline

$2.4131

$2.4430

-1.63%

-1.63%
(per gallon)











Retail gasoline

$3.0830

$3.0790

0.36%

0.36%
(per gallon; AAA)












Banks fall on mortgage ruling
While the jobs report was having the largest impact on the market today, financial stocks were hit hard after the Massachusetts foreclosure ruling.

The issue was over whether mortgages in the case were properly conveyed into trusts that backed mortgage securities.

Claims of wrongdoing by banks and loan servicers triggered a 50-state investigation last year into whether hundreds of thousands of foreclosures were properly documented as the housing market collapsed.

The probe came after JPMorgan Chase (JPM) and Ally Financial said they would stop repossessions in 23 states where courts supervise home seizures and Bank of America (BAC) froze U.S. foreclosures.

The industry has been closely watching this case, as many homeowners are challenging foreclosures brought by banks without proper documentation. Regulators in all 50 states have begun investigations into whether hundreds of thousands of foreclosures made in recent years were invalid.

JPMorgan, down as much as 4.1% in the early afternoon, closed down 1.9% to $43.64. Bank of America was off 1.3% to $14.25. Wells Fargo was off 2% to $31.50. US Bancorp fell 0.8% to $26.09.
 
Stocks stumble to a winning week
The jobs report came as the first week of the year ended. Despite today's selling, the Dow and S&P 500, up 0.8% and 1.1%, respectively, rose for the sixth week in a row. The Nasdaq was up 1.9%, its sixth gain in seven weeks.

Industrial, energy and materials stocks were the market leaders today. 

Pfizer (PFE), Boeing (BA) and Merck (MRK) were the Dow's leaders, while Travelers (TRV), Bank of America and JPMorgan Chase were the laggards.

Twelve of the 30 Dow stocks were higher, along with 32 stocks in the Nasdaq-100 Index ($NDX.X), which tracks the largest Nasdaq stocks. The index had been down as many as 23 points but closed down just 1 point to 2,277.

Wynn Resorts (WYNN) was the biggest gainer among Nasdaq-100 stocks, up 3.5% to $118.73. Apollo Group (APOL), the for-profit education company, was the laggard, off 3.8% to $37.98.

Qualcomm (QCOM), down 1.8% to $51.73, contributed 2 points to the Nasdaq-100's loss. 

Apple (AAPL) hit another intraday high of $336.35 before ending at $336.12, up 0.7%. The gain contributed 3 points to the index.

Dean Foods (DF) was the top S&P 500 stock, up 11.3% to $9.89 on news that hedge-fund titan David Tepper had picked up a 7.3% stake in the company.

AK Steel (AKS) was the S&P laggard, down 7.4% to $15.36 on a Goldman Sachs downgrade to "sell" from "neutral." The investment house cited weakness in the electrical steel market.

Short hits from the markets -- New York close
 
  Fri.     Thur.

Month chg.

YTD chg.
Treasury yields




 





13-week Treasury bill

0.140%

0.140%

16.67%

16.67%
5-year Treasury note 

1.956%

2.083%

-2.98%

-2.98%
10-year Treasury note

3.328%

3.419%

0.70%

0.70%
30-year Treasury bond

4.490%

4.534%

2.93%

2.93%
Currencies











U.S. Dollar Index

81.321

81.093

2.56%

2.56%
British pound

$1.5562

$1.5458

-0.28%

-0.28%
(in U.S. $)











U.S. $ in pounds

£0.643

£0.647

0.28%

0.28%
Euro in dollars

$1.293

$1.300

-3.34%

-3.34%
(in U.S. $)











U.S. $ in euros

€ 0.773

€ 0.769

3.45%

3.45%
U.S. $ in yen 

83.195

83.260

2.25%

2.25%
U.S. $ in Chinese

6.651

6.622

0.55%

0.55%
yuan











Canada dollar

$1.008

$1.004

0.50%

0.50%
(in U.S. $)











U.S. dollar 

$0.992

$0.996

-0.50%

-0.50%
(in Canadian $)











Commodities

 

 

 

 
Gold

$1,368.90

$1,371.70

-3.69%

-3.69%
(per troy ounce)

 

 





Copper

$4.28

$4.33

-3.70%

-3.70%
(per pound)











Silver

$28.67

$29.20

-7.32%

-7.32%
(per troy ounce)











Wheat 

$7.7400

$8.0825

-2.55%

-2.55%
(per bushel)











Corn

$5.9500

$6.0200

-4.42%

-4.42%
(per bushel)











Crude oil 

$88.03

$88.38

-3.67%

-3.67%
(per barrel)












17Comments
Jan 7, 2011 10:19PM
avatar

On the MA banking case.  Bankers are a cross-section of humanity.  A few are as dumb as a box of rocks and some are as bright as anyone I've ever seen.  There is no reason, ever, for sloppy procedures, in any legal proceeding.  Since a foreclosure directly impacts one's home, it must be done as a matter of last recourse and it must be done right.  I have no lost love for the TBTFs and offer no excuses for them or their robo-signing ways.  From my brief review of the decision, what's probably been missed here is called an allonge (a document used to  assign a legal document from one lender to another lender).  If they missed an allonge they do not deserve to foreclose on anybody's home.  But that doesn't necessarily mean the lender who did execute a valid allonge before them doesn't have the right to do so.  It's fairly simple.  If you don't make your mortgage payments owed under your valid loan docs as agreed, sooner or later you will no longer live indoors.  You paid them, you didn't pay.  Pick one.  In my experience, even that pesky missed an allonge defense virtually never works.  So you nice folks who think this is the first of many cases, shaking the very core of the banking system, could be right, but are almost certainly wrong.  They got in a hurry, they were sloppy, or they involved some slow boy or girl in the foreclosure process they shouldn't have.  Almost all banks operate professionally, take good care of their customers and try to do the right thing by them.  If they don't, all but TBTFs go away.

Jan 7, 2011 9:08PM
avatar
The economy needs to add 150k jobs per month for increase anywhere between 100-150 just to accommodate people just entering job market. Senator Reid said tea party will disappear as soon as job market get better? There's no soon at this rate. W/out jobs housing and consumer purchase will stagnate. We just finished Christmas xtra hiring people spend more at this time lets see what happens. So my opinion is a loss of 70k jobs.
Jan 7, 2011 3:29PM
avatar
Get a job ya bums. Use your Harvard degree like a glove and pick up beer cans from the side of the road to make the world a better place. Always something for nothing with ya bums.
Jan 7, 2011 1:52PM
avatar

Our biggest problem now is that Obama is still the president.  All he knows how to do is blame Bush for this and that.  He cannot create his own ideas on how to fix things and turn the economy around. 

 

What I find hilarious is how he bashed bush for his wreckless spending.  Obama has spent far more than Bush did and his spending hasnt exactly proven to have worked.  The rebuilding Americas Roads program here in Michigan helped mostly Mexicans.  Thats 75% of who was working on the road crews, not Americans.

Jan 7, 2011 7:16PM
avatar

Wow!..... What a difference the morning and afternoon posters make. Most of the morning posters are dumb useless idiots, while most of the afternoon posters are smart and well informed. Thumbs up

Jan 7, 2011 6:39PM
avatar

jobs gone

 

1)  chicken crap way of getting out of decision making.  name your cuts.  every pol says he/she will cut waste and fraud.

 

2)  you would not raise much by taxing the poor.  dont worry the reppublican party has done fine finding people to vote against their own economic interests.

 

3)  good idea, I always buy american when I can.

 

4)  voter referendums is how california got to where it is at.  People vote for more services and against more taxes.  We need adults at the decision table not teabaggers.  Hospital unions are the cause of higher medical fees?  start weaning yourself off Fox news.

 

5)  Nice idea, except for a small problem, it would be unconstitutional.  If you sue me I will spend 10million defending myself, so if you lose, you lose and pay a 10 million fine.  The rich would love it.  I think the rich can take care of themselves and get off the govt teat.

 

Revel we have enough of this thinking in congress already, one more wont make a difference.

Jan 7, 2011 6:37PM
avatar

W56 Trans Am,

You can't be serious! Bush signed off on $6.542 TRILLION of deficit spending not counting the $ 1.0 TRILLION on WAR, which he deliberately kept off the books!  That's $ 7.5 TRILLION.  Deficit for 2009 and 2010 totals $ 2.7 TRILLION and that includes those "Bailouts" and Stimulus Programs that you say you hate but were passed during Bush Admin tenure in 2008! AND probably saved this nation and the world from a Global Financial Meltdown and National Depression!  Congressional Budget Office (as non-partisan as "we" have) states the 2009 deficit was 30% Recession related, 30% Bush Administration tax cuts and program increases related,  20% Obama maintaining Bush Administration programs and 10% new Gov't spending!.  C'mon do some research! the www is out there!  Oh, and by the way, I live in a "Red" state, raised by "Red" parents and have voted for "Red" candidates all my life including the last one and his knucklehead VP candidate!  But facts are facts.  A little non-partisan o****ectivity is always appreciated.  Gov't spending is tied to gov't services.  Tell us where you want the cuts!

Jan 7, 2011 5:12PM
avatar
Revel, if he ran for Congress he would have to raise a lot of money (bribes) and pay them back if elected. That's the problem with Congress..(and the system as a whole)
Jan 7, 2011 4:53PM
avatar
Jobs Gone, I like your ideas.  Run for Congress.
Jan 7, 2011 4:00PM
avatar

Want jobs?

1. Reduce spending across the board 10%. It can be offset by waste reduction if they can find it. Then you will see State and Federal working become more effective. No services need to change, no teachers need to be removed. In fact we could make some of the teachers who are retired at 55 to come back to work if they want to get paid to reduce class size. That will cost us nothing. Why let our most experienced educators twiddle their thumbs.

2. Accept the fact that we need more revenue. Let the Bush tax cuts expire across the board for all income levels. We also need all Americans to pay some kind of Federal tax or they will always vote Democrat. Everyone would be a democrat if no one paid taxes.

3. Promote a buy American campaign so we can again produce what we consume. And boy we sure no how to consume.

4. Allow voter  referendums on public employee compensation and pensions. We cant continue to allow teacher and hospital unions to bankrupt our nation. We pay more in taxes per capita for our health care then any other nation and we still have 30 million people without health care. What's wrong with that picture.

5. Anyone who sues and loses must pay all of the court and defense cost. Lawyers need to be stopped. Lets educate more doctors and less lawyers. We have the most lawyers and the least amount of doctors per capita and we wonder why health care costs are high.

Jan 7, 2011 3:50PM
avatar
Gee, with the lobbyists for off-shore manufacturing spreading Dollars at a stupendous rate, I'm shocked that some hasn't trickled down to street-level or the tax base.HA-Ha!! Maybe if we became good global citizens, enviornmentally, by requiring all goods imported into the U.S.A. be manufactured under the same restrictions as the EPA, OSHA, and other government agencies impose on domestic manufacturers, perhaps our rampant job loss & accompanying loss of Tax-base would stop. We would create jobs, lower every-ones taxes via an expanded tax-base, reduce pollution of our planet, and alleviate the repugnant situation which our  job loss has created for our great nation.If our politicians wish to become bi-partisan,this could be a great uniting factor.
Jan 7, 2011 2:38PM
avatar
The numbers don't even come CLOSE to adding up.
when you magically raise the debt ceiling all seems to go away...POOF......all problems solved and then they say wait a minute if we have this higher debt ceiling it means we have more to spend........second debt ceiling raise in as many years??
Jan 10, 2011 12:06PM
avatar
Dance you dwarfs.The end is coming and it is not going to be pretty.Remember to stock up on canned goods and plenty of ammo to defend against the obamas.
Jan 8, 2011 1:15PM
avatar
Does make one wonder who does their research there.

fox new's where the inbreeding goes deep......where as nbc believes in reaching their tentacles into different pockets of different families for a game or two of pocket pool......the leftwing socialist agenda of the catholic church goes on....the freaking sob story of another illegal immigrant being shot dead by border patrol.....where the dead border patrol agents or any legal citizen of the country is nothing but a pile of garbage to the network!

why did the teen get shot, amazed msnbc aired that answer 

 

Video

Mexican police claim U.S. Border Patrol shot teen

may nbc and all affiliates get dispatched as newsweek did!

Jan 7, 2011 9:46PM
avatar

i think this stock market is a bunch of c.......scam going on does anybody agree

Jan 7, 2011 8:21PM
avatar

The Banksters Are Revealed (Reviled)

 

A Mass. court ruling goes against the banks so the Bankster's Wall Street Spawn drag the market down?  I'm sorry, I thought there were 50-states and not just MA!  I guess the Banksters are only happy if they can take our property without any just cause or proof.  I mean: what right do the "Great Unwashed Masses" have to expect banks to 'do their homework' and actually have standing to take your house?  The nerve of some people!

 

Thankfully, the Bankster - Wall Street connection is exposed for all to see!  Want a safe investment?  Buy firearms!

Jan 7, 2011 7:17PM
avatar

Watching those journalistic rocket scientists at faux news this morning.  They had a bit about the need to get rid of the administration's 39 Czars and rolled through some photos.  One of these was Richard Holbrooke (who, for the uninformed, unwashed, angry masses that frequent here, recently died).  Ladies and gents, Richard Holbrooke has left the building!  Thank you, thank you very much!  One Czar down.  38 to go?  Insensitive to his survivors?  Yes.  Does make one wonder who does their research there.  And some of us here hang on their every word, believing all of it is gospel.  Please know that I experience similar factual issues with the MSNBC crowd.  Classic!

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[BRIEFING.COM] The stock market ended the midweek session on a mixed note. Blue chip listings bolstered the Dow Jones Industrial Average (+0.4%) and S&P 500 (+0.3%), while the Russell 2000 (-0.4%) and Nasdaq Composite (-0.02%) underperformed.

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