Jobs report could make or break stock market

Stocks recovered just about all of Wednesday's losses. But the big drama comes Friday when the government issues its April jobs report. A bad report could hurt the market.

By Charley Blaine May 2, 2013 6:31PM
Enjoy what happened Stock market © Zurbar/age fotostock in the stock market on Thursday --  because Friday may be equally wacky.

Stocks enjoyed nearly as big a rally on the day as the losses they suffered through on Wednesday. The Standard & Poor's 500 Index ($INX) set a new closing high. The Nasdaq Composite Index ($COMPX) finished at a 12-and-a-half-year high. And the Dow Jones Industrials ($INDU) regained all but eight points of Wednesday's 139-point loss.

The markets could be set up for more volatility on Friday -- because at 8:30 a.m. ET, the Labor Department issues its April unemployment and jobs report. The report is easily the most important report of any month, and there are fears that the report could disappoint.

The consensus is the report will show an employment rate of 7.6%, the same as March, with 150,000 new jobs created. Economic consultants IHS Global Insight expects 155,000. A disappointment like the March report, that showed just 88,000 new jobs, could send stocks tumbling right at the open.
The Dow ended Thursday up 131 points to 14,832, just below its Tuesday finish and 34 points below its April 11 all-time high of 14,865.

The S&P 500 finished at 1,597.59, a gain of nearly 15 points. The close was two one-hundredths (.02)  of a point higher than Tuesday's record close of 1,597.57. The Nasdaq jumped 41 points to 3,341, its best finish since ending at 3,415.79 on Nov. 7, 2000.

So the market is in the throes of a battle -- between bears who look at data showing slowing economies around the world, and bulls who believe the U.S. recovery is strong enough that it can weather global economic problems.

Here's why the market jumped:

Weekly U.S. jobless claims surprised by falling to early 2008 levels.
The Labor Department said 324,000 workers filed for unemployment benefits last week. That's the lowest rate since claims were at 318,000 for the week of Jan. 19, 2008. While the claims rate doubled over the next year, it's down 51% since hitting 667,000 in the week of March 28, 2009.

Oil prices took off after the European Central Bank cut its key interest rate.
Crude oil
(-CL) in New York jumped $2.96 to $93.99 a barrel. Brent crude was up $2.84 to $102.79 in London. The ECB rate cut is a signal the Europeans may be serious about getting their economies moving again. And the ECB move followed the Federal Reserve's comment on Wednesday -- that it could actually expand its bond-buying program. Energy stocks were the strongest sector of the S&P 500. Gains for Chevron (CVX) and Exxon Mobil (XOM) contributed nearly 23 points to the Dow's gain. Let us not forget gold (-GC), up $21.40 to $1,467.60 an ounce.

Facebook's earnings cheered the Street.
Its shares were up $1.47 to $28.90 after reporting larger-than-expected advertising revenue from its mobile platform. The percentage gain was second-best among stocks in the Nasdaq-100 Index ($NDX). The index was up 41 points to 2,914. Facebook (FB)wasn't alone among tech stocks' showing nice gains. Apple (AAPL) rose $8.26 to $447.55. Google (GOOG) added $918 to $829.61. Intel (INTC) added 12 cents to $24.11 after naming Brian Krzanich to succeed retiring Paul Otellini as CEO.

General Motors said its North American business is pretty strong.
General Motors
(GM) shares hit a 52-week high of $31.82. Overall earnings were lower than a year ago, mostly because of troubles in Europe. Its North American business was very profitable. Ford Motor (F) was up 3 cents to $13.41. It's adding 2,000 workers in Kansas City to build more F-150 pickups.

Disney hit a new all-time high.
Walt Disney
(DIS) shares hit an intraday peak of $63.93 before closing at $63.88, up 67 cents. Disney is expected to report strong profits after Tuesday's close.

Interest rates dropped.
The 10-year Treasury yield fell to 1.631% from 1.639% on Wednesday. Thank the Fed and the ECB for that. Homebuilding shares rose nicely. Pultegroup (PHM) shares hit $21.93, up $1.03. The SPDR S&P Homebuilders (XHB) and the iShares Dow Jones Home Construction (ITB) exchange-traded funds also had strong gains.

More on Top Stocks
38Comments
May 2, 2013 7:20PM
avatar
Hard to believe that yesterday we found out that we had gained 5.2 million barrels of crude oil and today due to the big ECB cut, oil went up more then we lost yesterday. This oil game is so out of hand that it is getting to the pathetic point. Supply and Demand has been thrown out the window and has been replaced by Greed and the Fed free money. Big banks like Goldman Sachs and Citibank continue to get richer off the working man in this country and nobody seems to care. This is why more then ever we need regulation in oil futures trading and these traders need to be forced to take full physical delivery of all futures bought ahead. This would resolve the Speculation problem once and for all. Wall Street has no intention of letting oil prices drop no matter how much we cut back or gain and they need to be stopped. Go ahead and blame high oil on the global markets, but Wall Street is the driving force behind high oil prices. Think about things people, ever since oil skyrocketed to $150 a barrel in 2008, our economy has been trashed and it continues to stay in the cellar and as long as high oil prices are shoved down our throats, it will not improve. Congress needs to wake up and take action before we are in another recession or depression next time.
May 2, 2013 6:58PM
avatar
We know what will happen if the number is good and we know what will happen if the number is bad. The talking heads of Wall Street will say it doesn't matter. Nothing ever matters until it does. By then, nobody will care what the talking heads say.
May 2, 2013 7:38PM
avatar
an awful number at 8:30. little guy panics at open and markets swoon. smart money comes in and buys the cheap shares. by noon all is well with a slight gain. close may show a small loss.
May 2, 2013 7:46PM
avatar
the market is simply a mob that reacts (often adversely) to any rumour regardless of its pedigree.  stick to well managed,solid product , growing companies and you will transcend all this daily drama.
May 3, 2013 12:48AM
avatar
I don't trust the numbers. Actions speak louder than words. What we're going thru mirror's what took place in Germany after WW1 diverting of resources(jobs/labor) outsourcing family supporting wage incomes. Thanks to corporate America Wall St and help from politicians it's going on. Goodbye to tax revenues for product and labor especially in local communities, but don't worry you are picking up the tab. They also printed lots of marks which started the inflation to hyperinflation currency failure. So here we are in the American wealth transfer to the elite and at the door step of a financial crash. Don't look to market numbers for a sense of well being. The value of the dollar is dropping(more dollars to buy shares) companies cut jobs buy back shares all influence the fell good numbers but in reality are baseless. You not on solid ground.
May 2, 2013 8:35PM
avatar
With Ben and his presses at the helm, the market will always go up.  That is guaranteed for the "forseeable" future.  
May 2, 2013 7:10PM
avatar
What will break the Market, huge Margin calls when the markets truly weakens.
May 3, 2013 7:34AM
avatar
I well never invest is this stock market. This market is brought on by printed money and everyone know it. The retail investor know that when the fed even starts to stop printing money the stock market dive lower and the big money will have our money and we'll be broke. 
May 2, 2013 9:14PM
avatar
I guess the REAL issue I the definition of a- job. Financier isn't a career and subservience is slavery if it doesn't pay enough for the worker to survive. Show me a family that lives solely on the $50,000 average household income the Bureau of Labor Statistics calls the Median. The report issued today is a giant billboard. It reads-- fewer and fewer Americans are validated in this statistic. The broad mass that is not, is crushing the life out of the economy. Apparently, that means Bernanke infuses more fiat into the markets, more investors buy business platform job blockader stocks and nothing gets done to restore the balance necessary to keep us from catastrophic failure. Go man go... the longer this goes on the lesser chances we have of EVER recovering.  
May 3, 2013 8:36AM
avatar
Here's hoping the "job" numbers blow. For Wall Street to put everything on hold waiting for them is validation that we are one screwed nation and that the financial sector needs crushing and massive reconciliation.
May 3, 2013 8:30AM
avatar

TO THE (TBTF)   DIE BANK OF AMERICA DIE !

May 3, 2013 6:32AM
avatar

"And we are headed into another "Summer of Recovery"...?"

 

I don't think so. Hiring authorities are discriminating against all the primary categories. Who they want does not exist. The mortgage rate on a 15-year is 2.5% now but no one has a job with stability so homes are going to highest bidding companies. You don't improve your home when all your neighbors rent. There is an abundance of 2-3 job and job-less, not a lot of balanced living families. Pretty sure the stalemate is evident and rolling-in-money thinks it can outlast the rest. I don't think it will. You should be thinking more about my-- close the banks, end the Fed and get rid of Wall Street... because it makes more sense the further down we go.  

May 2, 2013 11:37PM
avatar

POCarl....Stranger things have happened...

 

Capitalist or not...Energy in this Country is our LIFE BLOOD...

We should not be held hostage for it..imo.

 

And it would stabilise investments in that Sector, which we have several.

May 3, 2013 8:56AM
avatar
Lets see more free money from Europe and more jobs then expected for the last 3 months...... in the black today!!!!!
May 3, 2013 9:37AM
avatar
Maybe Facebook should buy the failing US Postal service, then they could sell advertising space on a postage stamp.
May 2, 2013 6:58PM
avatar
Tomorrow's jobs report will NOT break the stock market.  Unless we have a net loss of jobs, which won't be the case, the market will be just fine.  Yeah, we might finish the week a little lower than we are now, but who cares? - The S&P is nearly at 1600, a little pullback is probably a good thing.  A drop of more than 1% would be a complete shock to everyone, and isn't going to happen.  In fact, I wouldn't be surprised if the jobs number comes out flat and stocks finish tomorrow with a slight gain.  God Bless Bernanke, the giver of all things positive in these markets.  His $85 billion a month transcends crappy jobs numbers, crappy GDP numbers, crappy factory production, etc...  He is the 2nd Messiah, after Obama of course.
May 3, 2013 11:17AM
avatar
NTU, what did I tell you about S&P 500 at 1600???

Now....if only we can hold onto it.

Next stop....1300 ???

Have a good one!

May 3, 2013 9:38AM
avatar
We doubled down with a Seven and a Four, got a King....Wooooohoooo..
May 3, 2013 8:38AM
avatar
April +165K
March revised from +88K to +138K
February revised from +268K to +332K
May 2, 2013 9:47PM
avatar

Time we stop riding the tidal wave and ride with god its all a joke

Report
Please help us to maintain a healthy and vibrant community by reporting any illegal or inappropriate behavior. If you believe a message violates theCode of Conductplease use this form to notify the moderators. They will investigate your report and take appropriate action. If necessary, they report all illegal activity to the proper authorities.
Categories
100 character limit
Are you sure you want to delete this comment?

DATA PROVIDERS

Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.

STOCK SCOUTER

StockScouter rates stocks from 1 to 10, with 10 being the best, using a system of advanced mathematics to determine a stock's expected risk and return. Ratings are displayed on a bell curve, meaning there will be fewer ratings of 1 and 10 and far more of 4 through 7.

104
104 rated 1
252
252 rated 2
457
457 rated 3
639
639 rated 4
495
495 rated 5
538
538 rated 6
704
704 rated 7
503
503 rated 8
350
350 rated 9
140
140 rated 10
12345678910

Top Picks

SYMBOLNAMERATING
UPLULTRA PETROLEUM Corp10
EOGEOG RESOURCES Inc10
TAT&T Inc9
COPCONOCOPHILLIPS9
DVNDEVON ENERGY CORPORATION9
More

VIDEO ON MSN MONEY

ABOUT

Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.

Contributors include professional investors and journalists affiliated with MSN Money.

Follow us on Twitter @topstocksmsn.