Dow Posts Modest Gains on Jobs Report
The Dow Jones Industrial Average rose 81 points, or 0.6%, today, helped by a strong jobs report, though that data was met with skepticism in many corners of the business world. The Department of Labor reported that 146,000 jobs were added in November, and that the unemployment rate ticked down two-tenths of a percent, to 7.7%, but several other numbers in the reports stuck out to observers. First, the DOL said that Hurricane Sandy did not have a material impact on employment, despite the spike in initial unemployment claims that followed the storm. Others were concerned with a decline in the labor force participation rate by 0.2%, to 63.6%. The raw number of unemployed Americans remained steady at 12 million, and many observers interpreted the drop in the unemployment rate as a result of people giving up on looking for work. The DOL also revised down job additions from September and October by a total of 49,000.
The Dow easily outpaced the two other major indexes, as the S&P 500 gained 0.3%, and the Nasdaq fell 0.4%, as Apple continued its slide. The world's biggest public company fell another 2.6%, giving the company its worst week since 2010. A number of concerns have hampered Apple lately, as rival Nokia cut a deal with China Mobile to make its Lumia Smartphone available, while the iPhone is still notably absent from China's number one carrier. Many analysts also seem to believe that Apple's best days may be behind it.
Banks won the day on the Dow, as JPMorgan Chase and Bank of America moved up 2.6% and 1.7%, respectively. This was due, in part, on the better-than-expected jobs growth, and news that consumer borrowing reached an all-time high of $2.75 trillion in October -- $14 billion ahead of September's total -- on increased credit card debt and student loans. JPMorgan also said its bonus pool would shrink by 2% from a year ago, a figure that appears much better than the industry average, as rival Citigroup said its bonuses would drop by 10%.
Microsoft was the blue chips' biggest loser, falling 1%, as a series of reports indicating weak Windows 8 sales have come out over the past week. A Goldman Sachs report today said that the Windows maker now owns just a 20% share of the computing market, down from 97% in 2000.
Finally, with the fiscal cliff looming, consumer sentiment tumbled, according to the University of Michigan, whose index fell sharply to 74.5, from 82.7 a month ago. Analysts expected a reading of 74.5.
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