The stock market is off to a rocky session after a very disappointing jobs report but bulls are not giving up without a fight. Most of the major indices are rebounding from their intraday lows. The NASDAQ composite is showing relative strength with a gain and the Dow Transportation index is shooting higher with a 1.3% rally. The U.S. dollar is down but it's not helping the commodities. Crude oil is off 42 cents to $82.24 a barrel. Gold futures are off almost $5 to $1,129 an ounce.

Asian markets were up across the board although gains in Shanghai were very limited with a +0.1% gain. The Hong Kong Hang Seng wasn't much better with a +0.12% gain. The Japanese NIKKEI rallied just over 1%. Investors remain worried about Japan Airlines. Yesterday Japan Airlines fell more than 9% and today the stock is off more than 12% on worries the company may be forced into bankruptcy.

Trading in Europe was mixed. Energy stocks suffered under a drop in oil prices while mining stocks rallied on analyst upgrades. The banks continued to show relative strength. The entire region plummeted on the disappointing U.S. jobs data but amazingly stocks fought their way back into positive territory. The French CAC-40rose +0.5%. The German DAX gained +0.19%. The English FTSE pared its losses to close with a -0.09% loss.

The one economic report the market has been waiting weeks to see was a huge miss this morning. The Labor Department announced that domestic businesses slashed 85,000 jobs in December. As of yesterday consensus estimates had risen to unchanged (zero) while there were plenty of individual estimates from +25K to +100K. The report wasn't all bad. November's report was revised into positive territory from -11,000 jobs to +4,000, which officially ends a two-year streak of jobs losses. Unfortunately, December's data shows just how bumpy the job creation track is going to be.

The headline unemployment rate was unchanged at 10%. According to the Labor Department the U.S. economy has lost 4.2 million jobs in 2009 and we've lost about eight million jobs since the recession began in December 2007. The government also said that "discouraged workers" who had given up looking for a job surged to 929,000 compared to 642,000 a year ago. The widest measure of unemployment counts those who have given up looking and workers with part time jobs who still want full time work. This read on unemployment ticked higher from 17.2% to 17.3%.

In addition to the jobs report the government also released the wholesale inventory data. The Commerce Department announced that wholesale inventories rose 1.5% in November, which is very bullish and a lot better than the 0.2% drop that economists were expecting. Sales at the wholesale level soared 3.3% versus estimates for a +0.9% rise. The Commerce Department also revised their October figures higher with wholesale inventories rising by +0.6% instead of +0.3%. Analysts are now starting to estimate that the fourth quarter GDP will come in around the +3.5% to +4.0% range.

Currently stocks look like they're trading sideways. Traders bought the dip this morning and the S&P 500 is hovering with a two-point loss. The Dow Industrials didn't see a very big decline this morning and the index has pared its losses to -21 points. Both the NASDAQ composite and the Russell 2000 are showing relative strength. The NASDAQ is up about nine points near the 2300 level and the $RUT is up just a fraction above the 642 level. Some of the best sectors today are transports, oil services, and railroads.

Chart of the S&P 500:

Chart of the NASDAQ:

Chart of the Dow Industrials:

Chart of the Russell 2000 index:

Looking over the OptionInvestor.com play list I see that FUQI is showing strength with a 3.2% rally. JPM is seeing some profit taking and might end its four-day winning streak. PCP is hitting new highs near $117. WHR is showing relative strength with a 1.9% gain.