Stocks Benefiting From Positive Reaction To Jobs Report - U.S. Commentary

(RTTNews) - With traders reacting positively to the monthly jobs report, stocks have moved notably higher over the course of the trading day on Friday. The markets are extending the upward move seen in the previous session, continuing to recover from Monday's sell-off.

The major averages have seen some further upside in recent trading, reaching new highs for the session. The Dow is up 95.46 points or 0.6 percent at 15,723.99, the Nasdaq is up 48.58 points or 1.2 percent at 4,105.71 and the S&P 500 is up 14.39 points or 0.8 percent at 1,787.82.

The strength on Wall Street comes on the heels of the release of the Labor Department's closely watched monthly employment report.

While the report showed a much smaller than expected increase in non-farm payroll employment, a jump in employment as measured by the household survey pushed the unemployment rate down to a new five-year low.

The report said non-farm payroll employment increased by 113,000 jobs in January following a slightly upwardly revised increase of 75,000 jobs in December. Economists had been expecting employment to climb by about 180,000 jobs.

Despite the weaker than expected job growth, the unemployment rate still edged down to 6.6 percent in January from 6.7 percent in December. The unemployment rate had been expected to come in unchanged.

With the unexpected decrease, the unemployment rate fell to its lowest level since hitting 6.5 percent in October of 2008.

The continued decrease by the unemployment rate came as employment measured by the household survey rose by 638,000 and the labor force increased by 523,000.

Chris Low, chief economist at FTN Financial, said the market reaction reflects "the conflict between two months of very weak non-farm payroll growth and three months of very strong household employment."

"As is occasionally the case with the employment situation report, it could take months to ferret out the truth," Low added.

Sector News

Biotechnology stocks have shown a substantial move to the upside on the day, driving the NYSE Arca Biotechnology Index up by 3.5 percent. The index is regaining ground after ending the previous session at its worst closing level in almost a month.

Myriad Genetics (MYGN), InterMune (ITMN), and Nektar Therapeutics (NKTR) are turning in some of the biotech sector's best performances.

Considerable strength has also emerged among gold stocks, as reflected by the 2.1 percent gain being posted by the NYSE Arca Gold Bugs Index. The strength in the sector comes as gold for April delivery is climbing $4.80 to $1,262 an ounce.

Electronic storage stocks also continue to see significant strength, with the NYSE Arca Disk Drive Index rising by 1.6 percent. Imation (IMN) is leading the sector higher after reporting a fourth quarter profit compared to a year-ago loss.

Tobacco, airline, and healthcare stocks are also posting notable gains, moving higher along with most of the other major sectors.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved to the upside during trading on Friday. Japan's Nikkei 225 Index surged up by 2.2 percent, while Hong Kong's Hang Seng Index advanced by 1 percent.

The major European markets also moved higher on the day. While the French CAC 40 Index ended the day up by 1 percent, the German DAX Index rose by 0.5 percent and the U.K.'s FTSE 100 Index edged up by 0.2 percent.

In the bond market, treasuries are seeing moderate strength after closing lower for three straight days. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 2.9 basis points at 2.673 percent.