Wall Street Holds to Gains
Updated from 1:38 p.m. EST
U.S. stocks were staying positive Friday afternoon as traders shrugged off the worst monthly unemployment reading in more than a decade and assessed troubling earnings statements from the automotive sector.
The Dow Jones Industrial Average was up 128 points at 8824, and the S&P 500 added 12 points to 916. The Nasdaq jumped 14 points to 1622.
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.
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