Jobs stink, Dow surges. What's up?

chart_dow_11000_2.top.gifClick chart for more market data. By Hibah Yousuf, staff reporter


NEW YORK (CNNMoney.com) -- Stocks rallied Friday, with the Dow crossing 11,000 and closing above the key level for the first time in five months.

The buying frenzy came after a sharp drop in the overall jobs figures in September boosted the chances of the Fed stepping in to stimulate the economy.

"The jobs number was terrible, but it clinches the deal for another round of stimulus from the Fed on Nov. 3, and that's why the markets are screaming today," said Phil Orlando, chief equity market strategist at Federated Investors.

The Dow Jones industrial average (INDU) rose as much as 84 points, or 0.5%, to a fresh-five month intraday high of 11,032. It eased from that level in the afternoon, but still finished with a 58-point gain, led by Alcoa (AA, Fortune 500) and Caterpillar (CAT, Fortune 500). The Dow closed at 11,006, its highest level since May 3.

The last time the blue chip index traded above that level was just days before the"flash crash" that sent the Dow tumbling nearly 1,000 points in one day.

The S&P 500 (SPX) also spiked to its highest level since May, gaining 4 points, or 0.6%, on Friday. And the tech-heavy Nasdaq (COMP) added 18 points, or 0.8%, and to finish at a fresh five-month high.

Markets posted their fifth weekly gain in the last six weeks: the Dow increased 1.6%, the S&P climbed 1.7%, and the Nasdaq rose 1.3%.

All three major indexes had been drifting between small gains and losses during the first two hours of the session before the rally kicked in.

Jobs and the Fed: With unemployment figures remaining one of the defining measures of the recovery, the Labor Department's monthly jobs report has been a major market mover all year.

"The September report is another sign that the recovery remains on shaky grounds," said Peter Tuz, president at Chase Investment Council.

The economy lost 95,000 jobs in September, the government said, though the private sector added 64,000 jobs. Unemployment rate remained unchanged at 9.6%.

"The economy's sluggishness also increases the odds of the Fed pumping more money into the financial system, which is viewed as a positive sign among some investors, because it adds liquidity to the system," Tuz said

He expects the market to continue moving higher, in part on speculation about Fed action. Stocks could also gain some traction if third-quarter financial results start coming out stronger than expected.

Economy: Investors also eyed a report on wholesale inventories from the Commerce Department. Inventories increased 0.8% in August, following a 1.5% gain in July. Economists were expecting a 0.4% rise.

Companies: After the bell Thursday, Investors welcomed strong earnings from Alcoa -- the first of the Dow components to report third quarter results.

The aluminum giant earned 9 cents per share -- excluding special items -- topping Wall Street's estimates for 5 cents per share. Sales rose 15% to $5.3 billion, beating forecasts for $4.96 billion in revenue. Shares of Alcoa (AA, Fortune 500) rose 5.7%.

Bank of America (BAC, Fortune 500) dropped 1% in the afternoon, after the bank announced it is suspending foreclosures in all 50 states as its reviews possible documentation problems. Last week, Bank of America froze foreclosures in the 23 states where a court's approval is required to foreclosure on a home.

French drugmaker Sanofi-Aventis (SNY) said that it will cut 1,700 jobs in the United States before the end of the year. The company's stock rose 0.5%.

World markets: European stocks closed mixed Friday. Britain's FTSE 100 and France's CAC 40 edged lower, and the DAX in Germany added 0.3%.

Asian markets finished the session mixed. Japan's Nikkei index fell nearly 1% and the Hang Seng in Hong Kong rose 0.3%. Coming back from a week-long holiday, China's Shanghai Composite soared 3.1% after Moody's said it may raise the nation's debt rating.

Currencies and commodities: The dollar remained under pressure, as the greenback fell against the Japanese yen and the British pound. It was flat against the euro.

The dollar index, which measures the buck against a basket of currencies, has dropped nearly 1% this week.

Gold futures climbed Friday, but remained below record highs hit earlier this week. Prices rose $10.13 an ounce Friday to settle at $1,345.30 an ounce. The precious metal settled at an all-time high of $1,347.70 Wednesday, and touched an intraday high of $1,366 an ounce on Thursday.

The price of crude oil for November delivery added 99 cents to settle $82.66 per barrel.

Bonds: The price rose on the benchmark 10-year U.S. Treasury, pushing down the yield to 2.38%. To top of page

Frontline troops push for solar energy
The U.S. Marines are testing renewable energy technologies like solar to reduce costs and casualties associated with fossil fuels. Play
25 Best Places to find rich singles
Looking for Mr. or Ms. Moneybags? Hunt down the perfect mate in these wealthy cities, which are brimming with unattached professionals. More
Fun festivals: Twins to mustard to pirates!
You'll see double in Twinsburg, Ohio, and Ketchup lovers should beware in Middleton, WI. Here's some of the best and strangest town festivals. Play
Overnight Avg Rate Latest Change Last Week
30 yr fixed3.85%3.81%
15 yr fixed2.95%2.91%
5/1 ARM3.37%3.07%
30 yr refi3.85%3.82%
15 yr refi3.02%2.98%
Rate data provided
by Bankrate.com
View rates in your area
 
Find personalized rates:
Index Last Change % Change
Dow 17,678.70 6.10 0.03%
Nasdaq 4,771.76 13.88 0.29%
S&P 500 2,057.09 5.27 0.26%
Treasuries 1.83 0.01 0.61%
Data as of 5:04am ET
Company Price Change % Change
Apple Inc 113.10 0.44 0.39%
Bank of America Corp... 15.85 0.02 0.16%
General Electric Co 24.59 0.08 0.33%
Mattel Inc 26.64 -2.19 -7.81%
Intel Corp 35.80 -0.54 -1.50%
Data as of Jan 26

Sections

The league announced on Monday that fans will be able to watch official NFL highlights on YouTube. More

Millions of Americans who lost their homes in the recession may become eligible to buy a new home beginning this year, according to a report. More

On demand delivery startup WunWun is expecting its order volume to double by the time they close up shop on Monday. All thanks to a blizzard. More

Identity thieves are stealing people's Social Security numbers and other key pieces of personal information in order to file a fraudulent tax return and claim a refund, the IRS warned Monday. More

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer.

Morningstar: © 2015 Morningstar, Inc. All Rights Reserved.

Factset: FactSet Research Systems Inc. 2015. All rights reserved.

Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved.

Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor’s Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2015 and/or its affiliates.