Stocks Hold Up Against Dismal Jobs Number

Updated from 9:45 a.m. EST

U.S. stocks worked their way higher at the open Friday, even after the release of the worst monthly unemployment reading in more than a decade.

The Dow Jones Industrial Average rose 195 points at 8891, and the S&P 500 added 20 points to 925. The Nasdaq jumped 35 points to 1643.

Economic data releases continued to point to a dismal downturn. The Bureau of Labor Statistics reported that October nonfarm payrolls declined by 240,000, worse than analysts' projections of 200,000. The September job-loss figure was revised to 284,000 from 159,000. The unemployment rate came in at 6.5%, its highest reading since 1994 and above economists' estimates of 6.3%.

"We knew it was coming," said Neil Hennessy, fund manager at Hennessy Funds. "When your stock is down 50-60%, why not clean your company out? Clean everything off the books, simply because you might as well go into 2009 and 2010 lean.

"Everything gets blown out of proportion for short-term consideration," said Hennessy. He said that U.S. employees are highly resilient. "They're not going to stay unemployed. ... If you take what we've already gone through, which is the auto, housing and finance -- those three sectors got absolutely annihilated -- and we're still here."

"The fourth quarter is shaping up to be one of the weakest in decades," wrote Chris Low, chief economist at FTN Financial, in an email. "The Fed will almost certainly cut rates to less than 1%, but there's not much more they can do there." He said the numbers bolster the argument for fiscal stimulus and that the Treasury may once again intervene in the financial system.

The Census Bureau's wholesale inventories report for September is due out a bit later, as is the Federal Reserve's look at consumer credit.

In terms of corporate news, quarterly earnings statements were still occupying investor attention.

Entertainment giant Disney (DIS Quote) reported decreased earnings, in part because of a charge related to debt owed by bankrupt brokerage Lehman Brothers. Fellow entertainment firm Discovery Communications (DISCA Quote) beat Wall Street estimates on both the top and bottom lines, and offered in-line guidance for its fiscal 2008 revenue.