US stocks snap recent declines amid non-farm payrolls, confidence data

U.S. stocks surged, snapping a five-day slide for the Standard & Poor’s 500 Index, as investors acknowledged better-than-forecast jobs growth to asses the strength of the economy and timing of Federal Reserve stimulus cuts.

The S&P 500 gained 1.1% to 1,805.09 at 4 p.m. in New York. The advance almost fully compensated the index’s drop this week, the first weekly slide in two months. The Dow Jones Industrial Average rose 198.69 points, or 1.3%, to 16,020.20. About 5.8 billion shares changed hands on U.S. exchanges, 5% below the three-month average.

“The real story is the economy is really good, so what we saw was a buying opportunity,” said to Wall Street Journal, Sam Wardwell, investment strategist at Pioneer Investments, which manages about $225 billion. “Its powered through a whole bunch of fiscal headwinds—not just psychological headwinds—and its gaining strength.”

The worlds biggest economy added 203,000 jobs in November, the Labor Department said, while the unemployment rate fell to a five-year low of 7.0% while economists had expected the report to show the economy had added 180,000 jobs and the unemployment rate dropped to 7.2%.

The Thomson Reuters/University of Michigan preliminary December consumer sentiment index jumped to 82.5 from 75.1 in November, a report showed on Friday. Economists expected an increase to 76.

In corporate news, General Motors Co. added 2.8% to $40.17, the highest level since it began trading in 2010 after the 2009 bankruptcy as Hayman Capital Management LP disclosed on Thursday it has taken a stake in the largest U.S. automaker.

J.C. Penney retreated 8.7% to $8.08, extending a three-day slide to 20%. A letter from the Securities and Exchange Commission requested “information regarding the company’s liquidity, cash position, and debt and equity financing, as well as the company’s underwritten public offering of common stock,” the struggling retailer said in a quarterly filing.

Sears Holdings Corp. slumped 3.8% to $48.09, pilling to 24% decline for the week after Edward Lampert, the hedge-fund manager who for the past eight years tried to turn around the retailer, cut his stake to below 50%.

Gap Inc. slid 1.9% to $39.46, a fourth-straight drop, even as sales at stores open at least a year increased 2% from last year. The biggest U.S. specialty-apparel retailer offered discounts of as much as 50% at its three brands during Thanksgiving and Black Friday.

Family Dollar Stores Inc. plunged 2.4% to $65.98, the lowest since July. Sterne, Agee & Leach Inc. equity analyst Charles Grom downgraded the discount retailer to “underperform” from “neutral”, with a 12-month target price of $56 per share. The stock has not advanced for eight straight sessions. is a financial media specialized in providing daily news and education covering Forex, equities and commodities. Our academies for traders cover Forex, Price Action and Social Trading.

Related News