Nasdaq, S&P 500 Reach Record Highs On Better Than Expected Jobs Data

Stocks have moved notably higher over the course of morning trading on Friday, more than offsetting the pullback seen in the previous session. With the upward move, the Nasdaq and the S&P 500 have reached new record intraday highs.

Currently, the major averages are hovering firmly in positive territory. The Dow is up 247.30 points or 0.9 percent at 27,293.53, the Nasdaq is up 75.47 points or 0.9 percent at 8,367.83 and the S&P 500 is up 24.05 points or 0.8 percent at 3,061.61.

The rally on Wall Street comes as much stronger than expected U.S. jobs data has washed away concerns about the economic outlook.

The Labor Department said non-farm payroll employment climbed by 128,000 jobs in October compared to economist estimates for an increase of about 89,000 jobs.

The report also showed substantial upward revisions to job growth in September and August, with revised data showing employment jumped by 180,000 jobs and 219,000 jobs, respectively.

With the upward revisions, employment gains in September and August combined were 95,000 more than previously reported.

“The upshot is that the three-month average gain is now 175,000, which is easily enough to outpace population growth,” said Michael Pearce, Senior U.S. Economist at Capital Economics.

He added, “That is in stark contrast with much of the recent survey evidence, which had pointed to a sharp slowdown in employment growth.”

Despite the stronger than expected job growth, the report said the unemployment rate inched up to 3.6 percent in October from 3.5 percent in September. The uptick matched economist estimates.

The unemployment rate crept up from the nearly 50-year low hit in the previous month as a 325-person jump in the size of the labor force more than offset a 241,000-person increase in the household survey measure of employment.

Meanwhile, traders have largely shrugged off a separate report from the Institute for Supply Management showing a continued contraction in U.S. manufacturing activity in the month of October.

The ISM said its purchasing managers index crept up 48.3 in October from 47.8 in September, although a reading below 50 still indicates a contraction in manufacturing activity. Economists had expected the index to rise to 48.9.

In the previous month, the index fell to its lowest level since hitting 46.3 in June of 2009, the last month of the Great Recession.

“Comments from the panel reflect an improvement from the prior month, but sentiment remains more cautious than optimistic,” said Timothy Fiore, Chair of the ISM Manufacturing Business Survey Committee. “Global trade remains the most significant cross-industry issue.”

Steel stocks have moved sharply higher in morning trading, driving the NYSE Arca Steel Index up by 4.1 percent to its best intraday level in well over a month.

U.S. Steel (X) has helped lead the sector higher after reporting a narrower than expected third quarter loss on revenues that exceeded analyst estimates.

Significant strength has also emerged among energy stocks, which are jumping along with the price of crude oil. Crude for December delivery is surging up $1.06 to $55.24 a barrel.

Biotechnology, semiconductor, and financial stocks are also seeing considerable strength, while gold, networking and telecom stocks have moved to the downside.

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Friday. Japan’s Nikkei 225 Index dipped by 0.3 percent, while China’s Shanghai Composite Index jumped by 1 percent.

Meanwhile, the major European markets have all moved higher on the day. While the German DAX Index has advanced by 0.8 percent, the French CAC 40 Index and the U.K.’s FTSE 100 Index are up by 0.6 percent and 0.5 percent, respectively.

In the bond market, treasuries have moved to the downside over the course of the session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 2.6 basis points at 1.717 percent.

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