Stocks Surge Despite Abysmal Jobs Data

16:30 ET
Stocks Surge Despite Abysmal Jobs Data
Dow +259.18 at 8635.42, Nasdaq +63.75 at 1509.31, S&P +30.85 at 876.07
[BRIEFING.COM] Despite some of the worst jobs data in decades, stocks managed to finish the session with impressive gains after reversing early losses.

From its session low to its session high, the stock market moved from a loss of 3.2% to a gain of 4.1%. It closed with a gain of 3.7%. Stocks finished every session this week with a gain or loss of at least 2.5%. It has been six months since the stock market finished a week without closing at least 1.0% higher or lower in any of the week's sessions.

Stocks fell into an early funk as participants chewed on a 533,000 drop in November nonfarm payrolls, which is far worse than the 335,000 drop that was expected. November manufacturing payrolls declined 85,000, which was actually less than the 100,000 decline that was widely expected. The unemployment rate, now at 6.7%, is the highest in roughly 15 years. The elevated unemployment rate comes as companies lay off workers as part of an attempt to shave expenses amid stiffening economic headwinds.

Recognition of such stiff economic challenges prompted selling in commodities. The CRB Commodity Index dropped roughly 4.3%, while oil dropped around 6.0% to close just above $41 per barrel. Oil's drop took it to its lowest closing level in four years.

Oil's slide weighed on the energy sector for much of the session. The sector traded with a loss of as much as 5.8%. However, broad-based buying pulled the sector into the green, helping it finish with a 1.3% gain.

The broad-based buying effort followed gains in the financial sector, which consistently outperformed the other sectors throughout the session. Financials closed 8.6% higher, led by multiline insurers (+17.5%), like Hartford Financial (HIG 14.59, +7.38). Hartford's share price more than doubled after the company issued upside guidance for fiscal 2008. Despite the massive gain, HIG is still down 85% from its 52-week high.

Elsewhere in the financial sector, the Justice Department said the Treasury is legally bound to inject capital into government-sponsored enterprises, according to Dow Jones. On a related note, Reuters reports the Federal Reserve bought $5 billion in debt from Fannie Mae (FNM 0.87, +0.00), Freddie Mac (FRE 0.86, -0.02), and FHBL.

Executives of the Big Three automakers have been making their own case for government funding. General Motors (GM 4.08, -0.03), Ford (F 2.72, +0.06), and Chrysler are asking Congress for billions to stave off bankruptcy. According to The Wall Street Journal, Chrysler has already hired legal firm Jones Day to provide a comprehensive analysis of the options available to the automaker.

Congressional officials continue to discuss the necessary checks and balances of providing the automakers with taxpayers' funds, making the likelihood of a speedy, clear plan uncertain.

Despite ongoing uncertainty surrounding automakers and the broader economy, stock investors successfully put together a solid rebound Friday, helping soften the week's downturn. The stock market finished the week with a 2.3% decline. That prompted bond investors to take some profits, sending the 10-year Treasury Note down around 48 ticks and pushing its yield to 2.71%. In the prior session the Note's yield fell to around 2.54%, which is its lowest level in decades.

..Nasdaq 100 +4.4%. ..S&P Midcap 400 +4.8%. ..Russell 2000 +4.9%.