- Non-farm payrolls smash expectations, jobless rate falls
- Taper expectations brought forward
- Intel rises on PC hopes after Citi upgrade
Dow Jones: 0.84%
S&P 500: 0.89%
US stocks gained strongly in early trading on Friday after a much better-than-expected November employment report, as concerns about a withdrawal of stimulus were outweighed by an improved outlook for the economy.
Wall Street benchmarks jumped in the opening hour of trade with markets snapping a five-day losing streak after stocks retreated in the run-up to the report.
However, non-farm payrolls increased by 203,000 in November, compared with a revised 200,000 gain the month before and well ahead of the consensus forecast for 185,000. Meanwhile, the unemployment rate fell to 7% from 7.3%, below the 7.2% rate estimated by analysts.
Marcus Bullus, Trading Director MB Capital, said that while the solid report will have undoubtedly increased taper speculation - especially given the resilient economic figures released over the last few days - markets have had plenty of time to factor in the move and the data shows that "the recovery [is] now well and truly entrenched".
"With the resurgent economy able to sail over hurdles like the government shutdown without missing a step, there is a growing consensus that it will take tapering in its stride just as easily. Tapering is coming, but it holds ever less fear for the bulls," he said.
Acting as a backdrop, PIMCO Co-Chief Executive Bill Gross has reportedly said he sees a 50% chance that the Fed will begin to taper it asset purchase programme at its next meeting on December 17-18th.
In other economic news, personal spending increased at a 0.3% month-on-month clip during November, ahead of the 0.2% expected by economists.
Personal incomes, on the other hand, dropped by 0.1% over the month, coming in well below the 0.3% expected.
Intel jumps after broker upgrade
Software giant Intel was on the up today after analyst Glen Young from Citigroup upgraded the stock from 'neutral 'to 'buy', saying that he's encouraged by stabilising corporate PC demand and that the company's current forecasts for PC sales next year are "sufficiently conservative".
Ulta Salon Cosmetics & Fragrance plummeted after saying that earnings totalled 70 cents in the third quarter, below the 74 cents consensus forecast. Meanwhile the beauty products retailer also predicted fourth-quarter profit of $1.07-1.10 a share, compared with the current estimate of $1.24.
Big Lots slumped after missing quarterly expectations and cutting its full-year guidance, while fellow retailer JC Penney fell sharply after confirming that the Securities and Exchange Commission has launched an inquiry into the company's finances.
Sears Holding gained after reporting that it is to spin off its clothing business, Lands' End.
Drugstore group Rite Aid jumped after saying that same-store sales gained more than expected last month.