A larger-than-expected expansion of nonfarm payrolls in October lifted spirits on Wall Street and buoyed stock prices. The Dow gained 167 points and closed at a record high. The Nasdaq rose by 61 points, and the S&P 500 Index advanced by 23. Twenty-seven of the Dow’s 30 components gained ground, led by JPMorgan Chase & Co. (JPM), which rose 4%. Volume was moderate. Advancing issues outnumbered decliners by four to three on the NYSE and by three to one on the Nasdaq. The prices of Treasuries weakened, while the price of gold futures dropped 1.83% to $1,284.60 an ounce. The price of crude oil on the New York Mercantile Exchange gained 0.42% to $94.60 a barrel.
For the week, the Dow and the S&P 500 Index both moved fractionally higher and the Nasdaq slipped fractionally lower.
In Other Business News:
- The economy added 204,000 new jobs to nonfarm payrolls in October, according to the Labor Department, which also revised job growth numbers higher by 60,000 for the previous two months. The job growth last month was roughly twice what many economists were forecasting. Tempering the good news, however, was word that the unemployment rate rose from 7.2% in September to 7.3% in October as 900,000 people dropped out of the work force.
- McDonald’s reported that same-store sales grew by 0.5% in October as growth in North America and Europe more than made up for weakness in Asia. The price of McDonald’s stock (MCD) lost 0.2% in today’s session.
- Standard & Poor’s Ratings Services downgraded France’s debt rating by one step to AA. An S&P statement said: “We believe the French government’s reforms to taxation, as well as to product, services, and labor markets, will not substantially raise France’s medium-term growth prospects. Furthermore, we believe lower economic growth is constraining the government’s ability to consolidate public finances.”
- Consumer morale has slipped lower so far in November. The University of Michigan’s sentiment index fell from 73 at the end of October to 72 in spite of the end of the two-week-long government shutdown last month. Most observers were expecting sentiment to improve.
What a fall. It almost seems like Halloween is still going on. I mean consider the following strange occurrences.
- Bob Wiser, who ran unopposed on Tuesday for a second term as mayor of Port Matilda, Pennsylvania, asked voters at the last minute not vote for him because he doesn’t want to be mayor anymore. Now why can’t I think up gambits like that? It’s the perfect win-win situation: If he wins, he wins, and if he loses, he wins. I guess that’s why they call him “Wiser.” (We are so far unable to ascertain results of the election, except that voter turnout in Port Matilda, which has a population of 606, was “light.”)
- Beard Team USA was the big winner at the World Beard and Mustache Championships in Germany last week, taking gold medals in the following categories: English mustache, freestyle mustache, natural full beard, full beard with styled mustache, Fu Manchu, and full beard freestyle. (Cool, but before I sing The Star Spangled Banner, I just have to ask: Do world-class whiskerers take performance-enhancing drugs like Rogaine, Miracle Grow, etc.?)
- Two weeks ago, a California driver was issued what may be the first-ever ticket for driving while wearing Google glasses. State law says one cannot operate a vehicle while a video monitor is on in front of the driver. The driver claims the glasses were not turned on, and the trooper had no way of knowing if they were or were not on. (These gizmos aren’t even on the market yet, and already it begins: The cat and mouse contest between people seeing life through aviator glasses and people seeing life through glasses Googley.)
- A kerfuffle broke out in Palo Alto, California, recently when the local fire department used its emergency public alert system to notify residents of a Sunday morning pancake breakfast. When some residents complained that it was an inappropriate use of town funds, the fire chief replied that the breakfast included a demonstration of the town rescue helicopter, which could benefit any resident in peril. (Excellent point, Chief, but more important, can I get my pancakes by helicopter?)
- The violin that belonged to the Titanic’s bandleader, Wallace Hartley, was successfully auctioned off this fall. Hartley used his instrument as the band played “Nearer My God to Thee” to calm passengers boarding lifeboats. Hartley was one of the 1,500 people who drowned that night, and the violin was found strapped to his body when he was pulled from the ocean 10 days after the disaster. The winning bid for the violin was $1.4 million. (But will it ever again play the high Cs?)
Have a great weekend. And if you’re fretting about the future of bond markets, listen to Jim Kochan address the question “What’s driving fixed income?” as my guest for On the Trading DeskSM.