The market has been waiting desperately for the jobs report and this morning's data was much better than expected. It was almost too strong! Economists were looking for a loss of 125,000 jobs in November. The Labor Department announced a loss of 11,000. This report was so strong it sparked new concerns that the Federal Reserve would be forced to raise rates a lot sooner than expected. Higher rates usually mean a stronger currency and that has produced a significant amount of short covering in an extremely crowded short-dollar trade. Naturally a rising dollar is fueling a sell-off in commodities. Gold futures are off more than $45 on the session.

Foreign markets were generally positive. The Japanese NIKKEI marked its fifth gain in a row with a 0.45% gain. The Japanese market surged more than 10% this week and closed back above the 10,000 mark thanks in part to the Bank of Japan's plans earlier this week to pump 10 trillion yen into the system to keep interest rates low. The Hong Kong Hang Seng snapped a four-day winning streak with a 0.25% decline but still gained 6.4% for the week. The Chinese Shanghai index rose 1.6% and managed a 7.1% gain on the week to reverse the 6.4% the prior week. The bounce continued in European markets as well. Most of the European bourses were trading in negative territory until the U.S. jobs data surfaced, which fueled a widespread rebound. The English FTSE inched higher with a 0.18% gain. The German DAX rose 0.8%. The French CAC-40 rallied 1.25%.

Today is all about the jobs report and while short-term stocks are paring their gains on interest rate worries the improvement in the labor market is long-term bullish (I'll try to temporarily ignore the risk of a double-dip recession - at least for today). There was plenty to be happy about with the November jobs number. Unemployment dipped from 10.2% down to 10.0%. What's really encouraging is the hours worked number. We need to see the work week grow before employers are going to start hiring people again and the average hourly week bounced from a record low of 33 hours to 33.2 hours. The Labor Department revised the September jobs number down from -219,000 to -139,000 and they revised October's loss from -190,000 to -111,000. If this trend continues then future revisions could turn November's -11,000 into a positive number. Fueling these gains was a big jump in temporary jobs, which is normally a precursor to real job growth. The under-employment rate, for those full time workers that are working part time to pay some bills, improved from 17.5% to 17.2%.

Sadly investors are selling the news. The market's major indices rallied sharply this morning only to reverse about 30 minutes into the trading day. Now they're bouncing along the unchanged level and struggling to stay in positive territory. I am encouraged by the 1.4% rally in the small cap Russell 2000 index but it is retreating off its intraday highs. Some of the best performing sectors today are airlines (+2.6%), railroads (+1.6%), defense (+1.3%), and semiconductors (+1.2%).

Chart of the S&P 500:

Chart of the NASDAQ:

Chart of the Dow Industrials:

Chart of the Russell 2000 index:

A quick scan of the play list reveals that NSC, a railroad stock, is showing strength and close to breaking out over resistance. PCP hit new 52-week highs this morning and is still up 1.6%.