Stocks Continue To Post Strong Gains In Mid-Day Trading - U.S. Commentary

(RTTNews) - After moving sharply higher early in the session, stocks continue to turn in a strong performance in mid-day trading on Friday. The markets are benefiting from a positive reaction to a better than expected monthly jobs report.

The major averages are currently posting strong gains, near their highs for the session. The Dow is up 155.60 points or 1 percent at 15,977.11, the Nasdaq is up 31.66 points or 0.8 percent at 4,064.83 and the S&P 500 is up 17.09 points or 1 percent at 1,802.12.

The strength on Wall Street comes on the heels of the release of a report from the Labor Department showing that stronger than expected November job growth helped pushed the unemployment rate down to a five-year low.

The report showed that non-farm payroll employment rose by 203,000 jobs in November following a revised increase of 200,000 jobs in October. Economists had been expecting employment to increase by about 180,000 jobs.

With the stronger than expected job growth, the unemployment rate pulled back to 7.0 percent in November from 7.3 percent in October. The unemployment rate had been expected to dip to 7.2 percent.

The bigger than expected decrease pulled the unemployment rate down to its lowest level since hitting 6.8 percent in November of 2008.

While the report seems to increase the likelihood that the Federal Reserve will begin tapering is asset purchase program in the near future, traders seem to be focusing on the economic optimism that was also generated by the report.

Thomson Reuters and the University of Michigan also released a report showing that consumer sentiment has improved by much more than anticipated in the month of December.

The report said the preliminary reading on the consumer sentiment index for December jumped to 82.5 from the final November reading of 75.1. Economists had been expecting the index to edge up to 75.5.

With the increase, the consumer sentiment index has further offset recent decreases, climbing back toward the six-year high of 85.1 set in July.

A separate report released by the Commerce Department showed an unexpected drop in personal income in October, although the report also showed personal spending growth that matched expectations.

Sector News

After moving notably lower over the past few sessions, housing stocks have shown a strong move back to the upside on the day. Reflecting the strength in the sector, the Philadelphia Housing Sector Index has surged up by 2 percent.

M/I Homes (MHO) and KB Home (KBH) are turning in two of the housing sector's best performances, jumping by 4.3 percent and 3.4 percent, respectively.

Computer hardware stocks are also seeing considerable strength, driving the NYSE Arca Computer Hardware Index up by 1.7 percent. With the gain, the index has reached a new record high.

Chemical, financial, and defense stocks are also turning in strong performances, moving higher along with most of the other major sectors amid broad based buying interest.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Friday. Japan's Nikkei 225 Index advanced by 0.8 percent, while China's Shanghai Composite Index dropped by 0.4 percent.

Meanwhile, the major European markets all moved to the upside on the day. While the German DAX Index jumped by 1 percent, the U.K.'s FTSE 100 Index and the French CAC 40 Index rose by 0.8 percent and 0.7 percent, respectively.

In the bond market, treasuries have turned slightly higher on the day after coming under pressure on the heels of the jobs data. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by less than a basis point at 2.855 percent after reaching a high of 2.932 percent.