Jobs report sends Dow to year's 2nd biggest gain

The economy added 175,000 jobs in May, although April's gains were revised lower. The Dow closes up 208 points as stocks continue a rebound that began Thursday.

By Charley Blaine Jun 7, 2013 10:09AM

Staff graphicUpdated: 5:12 p.m. ET.


U.S. payrolls grew by 175,000 in May, the Labor Department said Friday -- better than expected, although the unemployment rate ticked up to 7.6% from 7.5% in April.

The report may not have been robust, but it did set off one of the biggest stock market rallies for the year. The major averages recovered all of their losses from Wednesday's blowoff. While interest rates and oil prices also moved higher, gold and silver slumped.

The report painted a picture of an economy that continues to grow slowly and steadily. But not at the pace seen in the late fall and early winter. 


The economy has added an average 176,000 jobs a month over the last 12 months. But the job gains averaged 237,000 a month between November and February.  And, The New York Times noted, given current growth rates for the population and jobs, it will take as many as five years to get employment back to 2007 levels, before the Great Recession.
 

Investors were relieved the number was as good as it was. The Dow Jones industrials ($INDU) finished with its second biggest point gain of the year, rising 208 points to 15,248.

The Standard & Poor's 500 Index ($INX) jumped 21 points to 1,643, and the Nasdaq Composite Index ($COMPX) gained 45 points to 3,469. European stocks rebounded from early losses on the news.

The Dow's gain on Friday was exceeded only by its 308-point gain on Jan. 2.  The S&P 500's gain was its third-best of the year and best since April 14. The Nasdaq's gain was its fourth-best of the year, exceeded only by gains on Jan. 2, April 10 and April 14.


The market gains continued the rebound that began Thursday afternoon. From its low at 14,844, the Dow has soared more than 403 points, and it completed the recovery of its 217-point loss on Wednesday. The major averages ended the week with modest gains.

The Dow is up 16.4% for the year, with the S&P 500 up 15.2% and the Nasdaq up 14.9%.

Twenty-five of the 30 Dow stocks were higher on the day. Meanwhile, 452 S&P 500 stocks were higher, along with 87 stocks in the Nasdaq-100 ($NDX). The index had gained 41 points to 2,991.

Boeing (BA), Walt Disney (DIS) and American Express (AXP) were the Dow leaders. Merck (MRK) and AT&T (T) were the laggards.

Morgan Stanley (MS), Gamestop (GME) and NRG Energy (NRG) were the S&P 500 leaders, all 5.7% or more higher. Vertex Pharmaceuticals (VRTX), Celgene (CELG) and CA (CA), the renamed Computer Associates.

Apple (AAPL) was up $3.35 to $441.81. Google (GOOG) added $15.09 to $879.73, about $41 under its all-time high of $920.60.

The 10-year Treasury yield rose to 2.161% from Thursday's 2.075%. A big reason for the gain was that the stock market rally pulled money from bonds.


Gold (-GC), meanwhile, fell $32.80 to $1,383 an ounce in New York. Silver (-SI) slumped 96.4 cents to $21.74. Gold is down 17.5% in 2013. Silver is off 28.1%.

Crude oil
(-CL) in New York fell $1.27 to $96.03 a barrel. Brent crude was up 98 cents to $104.59.

Friday's jobs report dispelled a lot of the gloom created by the ADP National Employment Report, which  estimated private-sector job gains at 135,000 during the month.


The Labor Department said private-sector gains came to 178,000. Both estimates will be revised in the next few months as more data come in. In addition, the Institute for Supply Management's manufacturing report had suggested employment growth was tailing off.

What's not clear from the report is the effect of sequestration -- the mandatory spending cuts imposed by a 2011 budget accord -- on the jobs picture. Federal government employment was down 14,000 from April and 45,000 in the last three months. 58,000 from May 2012.

Many economists believe the effects of the spending cuts will increase over the coming months, particularly on defense-related jobs. But so far the drag has been offset by gains elsewhere in the economy

The report will probably intensify the debate of when the Federal Reserve will start to taper back its program of buying $85 billion in Treasury and mortgage securities every month. The Fed has said it will continue the program until the economic recover is self-sustaining and the unemployment rate is a 6.5% or low. But many economists believe the central bank will slow down the buying -- but not stop it -- after the Fed's September meeting.

There were plenty of downsides to the jobs report. The original April estimate of 165,000 jobs gained was revised down to 149,000, although the March gain of 138,000 was revised up to 142,000. The average work week was unchanged at 34.5 hours. Wage growth was little changed at $23.89 an hour.


The alternative measure of unemployment, which takes in the those looking for work, unable to procure full-time work or dropped out of the work force, at 13.8%, down slightly from April's 13.9%.


Construction overall added 7,000 jobs in May, but it's still down 1.9 million, or 24.9%, from its peak in 2006. Residential construction added 900 jobs to 590,600. But the gain since the bottom of the job bust in housing is just 6.4%. It's still down 42% from the peak in April 2006. 


Jobs in motor vehicles and parts grew by 2,400 to 796,600. That's up 27.5% from the bottom in June 2009 but still off 40.3% from the 2000 level of 1.33 million. 


Markets for the week



June 7

May 31

% chg.

YTD chg.
Dow Industrials

15,248.12

15,115.57

0.88%

16.36%
S&P 500

1,643.38

1,630.74

0.78%

15.23%
Nasdaq 

3,469.22

3,193.87

0.39%

14.89%
Russell 2000

987.62

913.67

0.35%

16.28%
Crude oil 

$96.03

$95.72

4.41%

4.59%
(per barrel)











U.S. Dollar Index 

81.67

83.40

-2.08%

2.25%
10-yr. Treasury yield

2.161%

2.164%

-0.14%

23.06%
Gold

$1,383.00

$1,393.00

-0.72%

-17.47%
(per troy ounce)












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240Comments
Jun 7, 2013 10:33AM
avatar

Only in America...

 

Can the market go up 160 points because;

 1) The unemployment rate went UP...

 2) Since it went up, Wall Street figures the QE stimulus is safe.

 

More financial crack for the addicts.

Jun 7, 2013 10:39AM
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This is nuts, how can so many people be so gullible?

Jun 7, 2013 10:25AM
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smoke and mirrors ,,,,lots of  part time summer work
Jun 7, 2013 10:46AM
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Thank you Uncle Ben -- for nothing. It has been five years and Wall Street still requires stimulus to keep breathing. What about all the American jobs that have been permanently tapered? What about all the American cities that have been permanently tapered? Even the QE has been all smoke and mirrors.
Jun 7, 2013 11:00AM
avatar
The Wall Street people are happy. The Jobs report is pathetic at best. It is reportes as good news because most people are too stupid to realize that the gains in the stock market does not reflect a strong economy. The gains in the stock market are happening because the Government will most likely continue feeding it the crack that it has come to crave and there will be no immediate plans to ween them from their drug.
Jun 7, 2013 10:41AM
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Investors seem to like the Fed printing more money.
Jun 7, 2013 10:55AM
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Watch for the revised numbers in a few weeks they will not be reported  with the same cheering because for they will probably be lower as they have been in the past. Liberal media  want you to believe jobs are growing when in fact they are not.
Jun 7, 2013 10:59AM
avatar

Same old ****. Monday it will go down again and then the report will say " worry because of this and that"

In reality;

Sell = Profit= stock go down

Cheap stock= buy = Stock go up.

 

They lie to us...

Jun 7, 2013 12:55PM
avatar
Replacing one full time employee with two or three part time people certainly does improve the numbers.




Jun 7, 2013 10:45AM
avatar
It cheered investors only because the report sucked.  It means Owebama and his boy toy Bernanke will continue to print money.

Liberals.  God love em!  LOL!
Jun 7, 2013 12:37PM
avatar
So, now we're celebrating a D- report card because it is better than an F.  Really.  How soon we all forget and how stupid (collectively speaking) we are.
Jun 7, 2013 11:50AM
avatar

And we know how much of a scam this is. The jobs report was mediocre at best. This stock fiasco is being manipulated by Bernake and the cracks are showing. Bernake will continue this until Obama is gone and the next president will have the worst mess in the history of this nation even possible the world.

What is being done by the Obama administration and aided by Bernake's shenanigans is nothing short of criminal and these people should be called on it.

Jun 7, 2013 11:09AM
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The wall street piranha are in the pool again today.
Jun 7, 2013 11:20AM
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SELL SELL SELL BEFORE THEY QUIT DRINKING THE KOOL-AID

 

CAN BUY BACK IN AFTER THIS HOUSE OF CARDS SMOKING MIRROR  HITS THE FAN THIS WINTER

 

OTHER THAN A FEW HOT SPOTS ON CONSTRUCTION, ENERGY AND HEALTHCARE

NOBODY HIRING AND OBAMACARE IS GOING TO BE A DISASTER

Jun 7, 2013 11:47AM
avatar
Two days ago we were down about 200 points due to the stimulus issue.  Now we are back up due to a payroll report. How inconsistent is Wall Street?  I would say very inconsistent.  It seems that people who invest must believe every comment their broker tells them. Seems like investors really can't think for themselves.  Sometimes I think that animals are brighter and more stable then the investor of Wall Street.
Jun 7, 2013 10:24AM
avatar
Jobs that are seasonal part time do not sustain a living for those who can find one... So let your greed be sparked by your false reasons and wait til this house of cards falls... 
Now talk about the countries who are vying to see the U.S. Dollar crumble as they buy and trade using their own currencies. What a day that will be for you ****ters. 
Jun 7, 2013 1:10PM
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Jobs report is only mediocre. We are living here in the United States under a smoke screen which is all propaganda.  The jobs figure does not truly reflect all the people off the job rolls which are unemployed but no longer counted. Wallstreet is becoming more and more sensative to Bernake's federal reserve policies than ever before. Are we a free market economy? It's a crime to keep interest rates not at an all time low for so low but practically at ZERO.....who is benefiting from all of this....keep hearing Bernake saved us from the greatest recession ever....what happens when all the funny money is not printed anymore and bonds are not being bought by the reserve? In the mean time the savers who cannot afford to invest in the market, or those folks that are lucky they can afford to live never mind buy stock sit back and see the rich get richer. What is wrong with this country?
Jun 7, 2013 11:57AM
avatar
Inflation is going down and were adding jobs. The fed needs to get the real inflation rate between a real deflationary 1% and 0% real inflation. No more real inflation. Printed money and inflation do not create jobs. Demand for goods and services create jobs. Inflation is a tax on consumer purchasing power.
Jun 7, 2013 11:12AM
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And if you believe this, i have some prime real estate in the Florida swamp land.
Jun 7, 2013 1:30PM
avatar
The Jobs report is why the market made its turn around late yesterday.    INSIDER TRADING.    Those people knew ahead of time what the report was.   They go after Martha Stewart.   Since congress can trade on insider trading.  I wonder ??????
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