The big event today was the Labor Department's non-farm payrolls report. Outside of the jobs number it is turning into a quiet summer Friday as people head out early for the long holiday weekend. World markets were mostly higher. The U.S. market is seeing a widespread bounce.
Asian markets were mixed. The Japanese NIKKEI lost 0.27% to fall 3.3% for the week. Chinese stocks rallied on news that the government was raising the limit that foreign funds can invest in Chinese stocks. The new draft rules raises the amount from $800 million to $1 billion. Analysts consider it more of a symbolic gesture but it's still a positive for the market (source: Reuters). The Hong Kong Hang Seng rose 2.8%. The Chinese Shanghai index gained 0.58%.
Across the globe European markets were up. In the U.K. investors got a look at Q2 construction spending, which fell less than expected. Meanwhile the International Monetary Fund (IMF) has revised their outlook on England from a -4.2% GDP to a -4.5% GDP for 2009. The IMF also revised their global forecast and now expects 2009 GDP to fall just 1.3% compared to their earlier estimate at -2.5%. Currently the IMF expects world GDp to rise 2.9% in 2010. The English FTSE index rallied 1.1%. The French CAC-40 rose 1.27%. The German DAX gained 1.57%.
The U.S. jobs report was the major headline today. Economists were predicting that the economy would lose between 225,000-230,000 jobs in July. The Labor Department announced that we only lost 216,000 jobs but they revised June and July job losses higher by nearly 50,000. While the job loss numbers are improving they're still negative. The unemployment rate jumped to a new 26-year high at 9.7%. Economists were expecting it to tick higher from 9.4% to 9.5%. The markets decided to rally on the job loss numbers and temporarily ignore the 9.7% unemployment rate.
Glancing at the markets the best performers today are gambling stocks, railroads, airlines, biotech and defense. Semiconductors are also putting in a good performance. These sectors are all up 2.0% or higher. Commodities are struggling. Oil, which has been positive, just turned negative for the day. Gold is seeing some profit taking. Grains are hitting new relative lows. Copper is down for the day. The surprise is that the U.S. dollar is weak, which is normally bullish for commodities.
The S&P 500 index is up about 10 points at 1013. The NASDAQ composite is up almost 28 points at 2011. The Dow Industrials are up almost 80 points at 9421. The small cap Russell 2000 index is up just over 4 points at 566.
Let's take a quick look at charts for the major averages:
Chart of the S&P 500:
Chart of the NASDAQ:
Chart of the Dow Industrials:
Chart of the Russell 2000 index:
A quick review of the OptionInvestor.com play list reveals AAPL doing well with a 2% gain and a rally to the $170 level. CMP is up more than 2.5% hitting new eight-week highs. FDX has hit our new trigger to buy calls at $70.55. Railroad stock GWR is up 2.1%. GWW is up 1.9%. Banking stock STT is up 1.5% and nearing potential short-term resistance at $52.00. Meanwhile the USO is retesting its trendline of support and its 100-dma near $34.80-35.00.
The U.S. markets are closed on Monday for the Labor Day holiday. Enjoy your weekend!