Dow jumps 136 on improved jobs data

Updated: 7:52 p.m. ET

Stocks started November with their best performance in seven weeks, thanks to two decent jobs reports and an improved outlook on manufacturing. 

If there was a downside to the rally, it was that the major averages pulled back from their early highs. The Dow Jones Industrial Average ($INDU) jumped as many as 177 points, fueled by gains for IBM (IBM) and Caterpillar (CAT), but then profit-taking set in.

Private-sector employers added 158,000 jobs in October, the ADP National Employment Report estimated, better than expected, and the Labor Department said initial jobless claims fell to 363,000 last week, down from 372,000 the prior week and smaller than the consensus estimate of 369,000. The Labor Department will release its October jobs report at 8:30 a.m. ET Friday. The unemployment rate is expected to rise slightly from 7.8% to 7.9%, with payroll employment rising by about 125,000 jobs.

After the close, shares of Starbucks (SBUX) jumped $3.35 to $49.97 from a regular close of $46.62. The coffee-shop giant's fiscal-fourth-quarte​r earnings of 46 cents a share beat the Street estimate of 45 cents. Revenue was up 11% to $3.36 billion and in line with estimates. Also moving higher because of strong earnings: Priceline.com (PCLN) and American International Group (AIG).

The Dow closed up 136 points to 13,233. The Standard & Poor's 500 Index ($INX) gained 15 points to 1,428. The Nasdaq Composite Index ($COMPX) jumped 43 points to 3,020, its first close above 3,000 for the index since Oct. 22.

Article continues below.The Nasdaq-100 Index ($NDX), which tracks the largest Nasdaq stocks, jumped 40 points to 2,688. The index had been up as many as 43 points.

Apple (AAPL), the biggest influence on the Nasdaq-100, was up $1.22 to $596.54 after peaking at $603 at 11 a.m. ET. Apple's Wednesday close of $595.32 was its first below $600 since July 30.

The Dow and the S&P 500 had their best one-day gains since Sept. 13. The Nasdaq's performance was its best since Sept. 6.  Materials, industrials and technology stocks were the market leaders.

Contributing factors to today's gains included a gain in Chinese manufacturing activity after two months of contraction. The official October manufacturing PMI came in at 50.2, slightly lower than the forecast of 50.3 -- but higher than the 50-point level, the government said. The HSBC Purchasing Managers Index was a 49.5, up from 47.9. At the very least, HSBC said, industrial activity in China has bottomed. The economy should recover slowly.

Also helping were gains in consumer confidence and auto sales.

The one group that didn't participate today: utility stocks. They fell as interest rates moved higher. The 10-year Treasury yield rose to 1.715% from 1.686% on Wednesday.

The market gains came even as earnings from Exxon Mobil (XOM) fell from a year ago. Revenue was off 7.7% to $115.71 billion, still enough to be roughly the size of the gross domestic product of Vietnam.  The decline was due to lower oil and natural gas prices  Shares, however, were up 43 cents to $91.60.

Energy shares were largely higher as crude oil (-CL) in New York settled up 85 cents to $87.09 a barrel. Brent crude, however, settled down 53 cents to $108.17 a barrel.

The average national retail price of gasoline was $3.507 a gallon, according to AAA's Daily Fuel Gauge Report. That's down from Wednesday's $3.521 a gallon. But because of power problems at gasoline terminals, there have been gasoline shortages around the New York area and in New Jersey.

Gold (-GC) settled down $3.60 to $1,715.50 an ounce.

Energy prices -- New York close
			Thur.			Wed.			Month chg.			YTD chg.
Crude oil (-CL)			$87.09			$86.24			0.99%			-11.88%
(per barrel)
Heating oil (-HO)			$3.0332			$3.0623			-0.95%			4.08%
(per gallon)
Natural gas (-NG)			$3.699			$3.6920			0.19%			23.75%
(per mil. BTU)
Unleaded gasoline (-RB)			$2.6336			$2.6303			0.13%			-0.90%
(per gallon)
Brent crude			$108.17			$108.70			-1.26%			0.74%
(per barrel)
Retail gasoline			$3.5070			$3.5210			-0.40%			7.05%
(per gallon; AAA)

Markets are still recovering from the aftermath of Superstorm Sandy, which wreaked havoc up and down the Eastern Seaboard. The storm forced financial markets to close Monday and Tuesday, and nearly 5 million people are still without power.

Trading could still be volatile, Reuters noted, with many traders and money managers unable to reach their offices because of power and gasoline shortages and limited mass transit.

Sandy hits auto sales
Sandy's fury caused U.S. auto sales to fall short of expectations in October, but industry executives still see a strong fourth quarter as the housing market improves. Sales came in at a seasonally adjusted annual rate of 14.29 million units, up 7.1% from a year ago but down 4.35% from September, according to market researcher Autodata.

While General Motors (GM) and Chrysler Group reported their strongest sales for October since the 2007-09 financial crisis, the massive storm that hit the U.S. East Coast took as much as 30,000 vehicle sales out of the mix.

The storm turned what was expected to be a big month for auto sales into a mere healthy month, TrueCar.com analyst Jesse Toprak told Reuters.

Ford Motor's (F) October sales edged up 0.4%. Sales for Toyota Motor (TM) and Honda Motor (HMC) rose about 16% and 9%, respectively. Nissan (NSANY) sales fell 3.2%.

GM was up 18 cents to $25.68. Ford added 9 cents to $11.25. Toyota added 58 cents to $78.05 in New York. Honda was up 19 cents to $30.35. Nissan rose 18 cents to $16.90 in New York.

Winners and losers
JDA Software Group (JDAS), a maker of supply-chain management software, soared $6.61 to $44.76 after it agreed to be bought by privately held rival RedPrairie Corp. for about $45 a share, or $1.9 billion, in cash.

Pfizer (PFE), which delayed the release of its quarterly results because of the storm, posted revenue that fell far short of expectations, sending shares down 32 cents to $24.55.

Teen-apparel retailer Zumiez (ZUMZ) shares fell $4.19 to $21.13 after the teen retailer cut fourth-quarter guidance on weaker-than-expected​ October same-store sales. The company blamed a challenging sales environment in Europe. October same-store sales rose 0.6%. Street analyst forecasts were for a same-store sales increase of 4.6%. Zumiez now expects to earn between 38 and 39 cents per share, down from its prior view of 42 and 45 cents.

Macy's (M) climbed  $2.45 to $40.52. The second-biggest U.S. department-store chain boosted its forecast for same-store sales in the second half of the year to a 4% gain compared with the year-ago period. The company had previously estimated an increase of 3.7%.

Ross Stores (ROST) dropped $3.82 to $57.13, second-worst among the S&P 500 stocks after Teredata (TDC). The operator of apparel and home-accessories stores said sales rose 4%, missing the average projection for a 4.3 % gain from analysts surveyed by researcher Retail Metrics.

Target (TGT) fell 81 cents to $62.94. The second-biggest U.S. discount retailer posted a 2.4% increase in same-store sales, missing the 2.9 % estimate.

Abercrombie & Fitch (ANF) climbed $2.65 to $33.23. The teen-clothing retailer didn’t update its sales figures. The absence of pre-announcement "may mean more limited downside risk, and could provide relief" to the stock, UBS analyst Roxanne Meyer wrote in wrote in a note to clients.

Manufacturing expands in October
Manufacturing in the U.S. expanded in October at a faster pace than projected as orders and production picked up, showing the industry is stabilizing.

The Institute for Supply Management’s factory index climbed to 51.7 last month, the highest since May, from 51.5 in September. Economists estimated 51 for October. A reading of 50 is the dividing line between growth and contraction.

The report shows American factories are holding up amid a global economic slowdown that’s weakened manufacturing from Asia to Europe. At the same time, companies such as Cummins (CMI) are feeling the effects of the so-called fiscal cliff that’s prompted cutbacks in equipment purchases.

Short hits from the markets -- New York close
			Thur.			Wed.			Month chg.			YTD chg.
Treasury yields
13-week Treasury bill			0.0900%			0.110%			-18.18%			800.00%
5-year Treasury note			0.726%			0.715%			1.54%			-12.53%
10-year Treasury note			1.714%			1.686%			1.66%			-8.39%
30-year Treasury bond			2.894%			2.851%			1.51%			0.17%
Currencies
U.S. Dollar Index			80.136			79.987			0.19%			-0.48%
British pound			1.6129			1.6137			-0.05%			3.81%
(in U.S. $)
U.S. $ in pounds			£0.620			£0.620			0.05%			-3.67%
Euro in dollars			$1.29			$1.30			-0.17%			-0.13%
(in U.S. $)
U.S. $ in euros			€ 0.773			€ 0.771			0.17%			0.13%
U.S. $ in yen			80.16			79.80			0.45%			3.97%
U.S. $ in Chinese			6.24			6.23			0.09%			-1.37%
yuan
Canada dollar			$1.004			$1.000			0.35%			2.32%
(in U.S. $)
U.S. dollar			$0.996			$1.000			-0.35%			-2.34%
(in Canadian $)
Commodities
Gold (-GC)			$1,715.50			$1,719.100			-0.21%			9.49%
(per troy ounce)
Copper (-HG)			$3.552			$3.5175			0.98%			3.38%
(per pound)
Silver (-SI)			$32.248			$32.316			-0.21%			15.52%
(per troy ounce)
Wheat (-ZW)			$8.6850			$8.645			0.46%			33.05%
(per bushel)
Corn (-ZC)			$7.5100			$7.558			-0.63%			16.16%
(per bushel)
Cotton			$0.7021			$0.701			0.20%			-23.42%
(per pound)
Coffee			$1.5345			$1.547			-0.78%			-33.18%
(per pound)
Crude oil (-CL)			$87.09			$86.240			0.99%			-11.88%
(per barrel)